WBJ: The acquisition was one of the most significant logistics transactions in Poland and Europe this year. Is this a clear signal to the market?
Soren Rodian Olsen: The past 12-18 months have been challenging to navigate, but as markets are slowly stabilizing, it’s fair to say that uncertainty remains regarding the real estate market, which is why many international investors are holding back on capital deployment into this asset class. That said, Nrep has a proven track record in capturing investment opportunities with risk-adjusted returns, and our recent acquisition of a majority stake in 7R, one of Poland’s largest logistics developers, is a clear testament to our abilities in sourcing highly attractive opportunities.
I think that this one deal alone does not necessarily signal that the market has completely turned around, but given the scale and strategic nature of our investment, we feel that we have firmly established our logistics business in the Polish real estate market and are strongly positioned for capturing the upswing that may be expected during the next 24 months.
The investment is €200 million in equity. How much is being directed for further development?
Most of our investment will fuel the “well-oiled 7R development machine” to facilitate the delivery of a substantial pipeline of new projects in all sub-markets in Poland. Considering that some of 7R’s competitors have less access to forward-funding equity, we believe there is currently a great opportunity for a well-funded developer to deliver new products to a logistics market that continues to enjoy strong demand and take-up.
Regarding further developments, the press release mentioned both Poland and Czechia. Can you elaborate on that?
Poland remains a critical logistics investment focus for Nrep outside the Nordics and our joint business plan for 7R. While 7R has a smaller presence and a development pipeline in Czechia, our €200 million investment is predominantly aimed at the Polish market.
The business will continue under the 7R name. Is this in line with Nrep's acquisition policy?
Nrep has acquired 7R via its NSF V fund, and 7R will not be integrated into Nrep (or Logicenters) but will continue to operate under the 7R brand and with the same management in place.
We have monitored 7R for quite a while and like the people, the culture, and the quality product that they deliver, which is why we do not intend to make any radical changes to the business. Yet clearly, our equity will help to take 7R to a much higher level.
Is this a first step for Nrep in CEE, and shall we expect more acquisitions?
While Nrep will actively continue its investments in the living sector (PRS and Serviced Living), our investments in logistics will aim to grow 7R’s development pipeline and market share in Poland and potentially in Czechia. We view the opportunity with 7R as a significant game changer in the Polish real estate market, and our capital deployment will be focused on driving the growth of 7R, not additional logistics acquisitions.
What were the fundamental issues that makes this such an ideal combination?
Our investment process with 7R has been detailed and prudent, during which we got to know the management board and 7R’s admirable founder, Tomasz Lubowiecki, as well as many other people within their organization.
It is fair to say that we have identified a great synergy between the culture and values of Nrep and those of 7R. Both firms passionately focus on creating positive change for people and the planet, evidenced by ambitious ESG agendas and targets. Moreover, 7R enjoys an excellent reputation in sourcing strong locations for its clients (tenants), and we envisage synergies for international clients that we serve in the Nordics.
Finally, we strongly believe in the sustainability and quality of 7R’s product which in many ways mirror our Nordic approach, and we expect to explore additional synergies, considering Nrep’s unique track record in ESG and sustainability.
What is the market share after the acquisition?
7R is a Top 3 logistics developer in Poland, and our investment is not directly aimed at growing market share but to grow value for our investors and the clients of both firms. We are confident that the combination of our financial capabilities and 7R’s committed workforce and track record will help grow 7R’s position in the Polish logistics market and cement 7R's position as one of the most attractive development partners for tenants in the logistics and light production sectors.
Soren Rodian Olsen
Soren Rodian Olsen has 21 years of senior management and real estate experience in Poland. He heads Nrep’s logistics branch in Poland, Logicenters, and set up Nrep’s offices in Warsaw in 2021. Prior to joining Nrep, Soren was a Partner and Head of Capital Markets at Cushman & Wakefield. In previous roles he was Head of Aberdeen Asset Management in Poland and between 2002 and 2008 he worked for Bank BPH (Bank Austria Creditanstalt) and mBank (Commerzbank) as Head of Asset Management, Real Estate, Supply Chain and Business Continuity. He holds an MBA from the University of Westminster, is a member of RICS and is the Chair of ULI Poland.