Articom Center targets market lull for launch
By : Anna Staniszewska
The local Litewska Development plans to start building a seven-story office block in Warsaw this autumn, for completion by late 2002, the company said last month. The project, called the Articom Center, will bring an extra 4,500 square meters of modern office space to the center of the capital.
"We hope to get a construction permit by the end of September," said Martin Kocher, managing director of Litewska Development. The 930 square-meter plot, on Al. Szucha 21, will also have underground parking for 60 cars.
Kocher said that despite the decline in the construction market, the project should have no trouble finding tenants. "We chose this site because the price and location were right," he said. Kocher added that the supply of modern office space in the capital is expected to taper off in the coming months, with Articom as one of the few developments that will come on the market next year. The developer said it was too early to quote rental figures.
The project is a joint venture set up two and a half years ago between Litewska Development and BHI Polska, a subsidiary of Germany's Bayerishe Hausbau Industrie.
Litewska Development also plans to build residential property in Warsaw during the next few years with total investment of office and residential real estate estimated at $52 million by 2004. But Kocher refused to give any other details about the housing project. "It's too early to say anything more than that it will be very exclusive, similar to ING's Holland Park, but only for sale," he said.
The timing and location of the new office project will be good business for Litewska Development, according to market watchers. "If they are aiming at 2003, that's good timing for the market and the historical location is excellent," said Nigel Wade, director of U.S.-based CB Richard Ellis. "These (two factors) can make the project work." He estimated the asking rent would be about $20 per square meter a month. He said the project was aimed at smaller companies, which may want "build-to-suit" space.
Reports
Warsaw ranks far behind London, Madrid and Paris for warehouse stock, according to a report by U.K.-based property consultancy King Sturge.
Total modern warehouse stock (completed after 1997) in the Warsaw area is 570,000 square meters much lower than in other European capitals. The ratio of modern warehouse stock to modern office space in greater Warsaw is 0.35:1 compared with 1.25:1 in Paris, 1:1 in London and Madrid, and 0.55:1 in Brussels.
After a sharp drop in rents for the past few years, prices leveled off this year in line with Western Europe, but are still higher than in Prague and Budapest. Within Warsaw's city limits, tenants pay $6-$7 per square meter a month and for office space next to warehouses, $12-$17. In the outskirts, rents range from $4.50 to $5.20 per square meter for warehouse space and $12-$15 for office space. Logistic centers run $4-$5 a square meter for leasing, while offices vary from $10 to $14. Average service charges in warehouses cost $1.20 to $2.30 a square meter monthly.
Warehouse tenants comprise international logistic firms such as Raben, FM Logistics, Maersk and Giraud, as well as domestic and foreign firms such as IBM, Coca-Cola, Electrolux, Whirlpool, Polska Telefonia Cyfrowa, Cryovac, Bemis/MACtac and Avery Dennison.
The report said supply will be smaller this year. In the first half of 2001, 68,000 square meters of warehouse space came on the market while another 65,000 square meters is scheduled to be completed by 2002. Last year new warehouse space amounted to 230,000 square meters.
King Sturge estimates that warehouse stock in Warsaw within the next two years will increase by some 1 million square meters, of which 800,000 square meters will go to four investments Europa Park, Alliance Logistics Centre, Millenium Logistics Centre and Nadarzyn Business Park.
Announcements
n Internet supplier TDC Internet Polska, a subsidiary of Denmark's TeleDenmark, leased 3,000 square meters last month in the Taurus office building on Warsaw's ulica Domaniewska. TDC Internet Polska is a holding company that controls six Internet firms: Polska Online, Pik-Net, Polbox, Multinet, PDI and IDS. The 17,900 square-meter development by Globe Trade Center (GTC) is scheduled for completion in October. Asking rent in the building, which has 12 levels and three underground floors for parking, is $23 per square meter a month, plus a $5 service charge. Anglo-American property consultancy Jones Lang LaSalle acted on behalf of TDC Internet. GTC, the developer, was represented by Anglo-Dutch DTZ Zadelhoff Tie Leung, a real estate consultancy.
n The U.S.-based parent of property consultancy CB Richard Ellis Services merged last month with BLUM CB, a subsidiary of U.S. investment firm BLUM Capital Partners, in a deal worth $800 million. Under the terms of the agreement, CB Richard Ellis Services' shares are worth $16 each. Shareholders include BLUM Capital Partners, board members and directors of CB Richard Ellis as well as Freeman Spogli & Co. As a result of the merger, the firm will be delisted from the New York Stock Exchange.
CB Richard Ellis employs 10,000 people in 250 offices in 44 countries. The company has been active in Poland since 2000, when the company changed its name from Henry Butcher, which was set up in 1991. The Polish branch of CB Richard Ellis has offices in Warsaw, Poznan, Katowice and Krakow.
n Poland Construction and Property Research, the publisher of monthly real estate magazine Eurobuild Poland, signed a lease contract last month for 111 square meters in Centrum Milenium, a 15,300 square-meter office building in Warsaw's Praga district. The building is marketed by the U.K.'s King Sturge and the Anglo-American consultancy Jones Lang LaSalle.
