Filling Niches

WBJ Observer talks to Andrzej Rosiński, CEO of Waimea Holding S.A., about the firm’s strategy of building modern warehouse and industrial space in emerging and niche locations WBJ Observer: You have just delivered the first stage of the Waimea Logistic Park Korczowa, located close to a border with Ukraine. Why did you decide to build a 50,000-sqm facility so far to the east? Andrzej Rosiński: We’re building a logistics and cargo hub here, so location is the most important aspect. The biggest advantage of this place is the highway which connects the whole of Europe, from Lisbon to Ukraine. Its final exit is right here in Korczowa. This is also the biggest border crossing to Ukraine. Our plan is to lease this space to companies that want to store and package their goods, or use logistics services within the EU before delivering them to Ukraine or other eastern markets. We are now witnessing an improvement in the political situation in Ukraine. We can see how much Ukrainians want to join Europe. Finally, this region has one of the highest unemployment rates in the country, so acquiring employees in various specializations will be relatively easy. That’s why we want not only logistics firms here, but also manufacturers. What kind of manufacturing have you envisioned here? We are close to Aviation Valley – a cluster of aviation component producers. Yes, we are, but it could be a number of different sectors, from pharmaceutics, to aviation, to wind energy, like our tenants in Szczecin. In Szczecin, 50 percent of our park is leased to logistics firms and 50 percent to manufacturers. In total they employ 1,500 people. In Korczowa we could help create 1,200 jobs if we attract factories. If, however, we lease only to logistics firms, which is also possible as this is the last exit from the A4 highway and next to the biggest border crossing to Ukraine, then the number of jobs would be between 500 and 600. You have investments in several locations: in Szczecin, Bydgoszcz, Rzeszów and Korczowa. You seem to be choosing markets that are either emerging locations, or not yet on international investors’ radars. Why not established markets? In my opinion the “established” locations are reaching saturation. It looks good on a spreadsheet, but these facilities will sooner or later face vacancy issues. We don’t want that. We build our projects in niches, in areas that need economic development and are passed over by large developers and international corporations. Besides, Szczecin is a big market, with access to the sea. In fact, we were the first ones to build there and we “created” that location. We’ve built 77,000 sqm there. It is now our flagship location and it’s 100 percent leased. This investment has inspired us to launch two more projects in Szczecin. We’ve invested over PLN 500 million in the city. Bydgoszcz is our second location, which we are starting to promote. It’s a large city in an area which has very little logistics and industrial space. We are now constructing the first facility – Waimea Logistic Park Bydgoszcz – altogether we will build 90,000 sqm. As soon as we launched the commercialization process of our project, we knew it was a good idea. Our third location is in the Podkarpackie voivodship, where we have two investments. The first one in Korczowa, and we have launched construction on Terminal Cargo near the Rzeszów-Jesionka airport. This shows the scope of our activity: we build logistics/industrial parks, as well as multi-modal facilities: near airports, seaports and railway hubs. How much of your decision to build this center in Korczowa was due to the A4 highway, which is set to be completed soon? If it weren’t for the highway, we wouldn’t be here. The A4 is set to be completed shortly, the remaining section between Jarosław and Rzeszów is to be delivered within two months. There will also be the Via Baltica route, with the S19 expressway intersecting the A4 nearby. The same situation was in Szczecin: the A3 highway improved transport tremendously. Are you building entirely speculatively or do you have some pre-leases? There are a few pre-leases, but most of the space we build is speculative. We have a method: first we build a smaller unit, and then, once companies start moving in, we continue with larger units. The first unit in Korczowa has 7,200 sqm of space, while the entire complex will feature 50,000 sqm. What is Waimea’s strategy: do you develop and sell your projects or will you keep them all in your portfolio? We intend to sell our parks, whereas we plan to keep the multi-modal projects in our portfolio. Have you already secured a land bank for future projects? Does the new law on arable land affect your business? It does, because we used to implement a lot of our projects based on a special individual planning permit (in Polish the so-called “W-Z”). Now it’s impossible. We need to wait for the master zoning plan to be adopted and that takes a lot of time.