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The Warsaw Voice » Real Estate » September 3, 2008
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Location First, Second and Third
September 3, 2008   
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Robert Dobrzycki, regional partner for Central and Eastern Europe at Panattoni Europe, talks to Magdalena Fabijańczuk. In the first half of this year, Panattoni Europe became the leading warehouse space developer in Poland in terms of the number of lease contracts.

What investment decisions do you think have been the most profitable and spot-on ones for your company in its business in Central and Eastern Europe?
It is hard to name investment projects that have made Panattoni Europe a success. We rather owe our success to our consistent policies. We never compromise when it comes to finding the right location. In every region, we want to build on sites whose location is absolutely the best in terms of transportation and available labor force. Logistics and industries constitute the strength of every good location. Everything has a price, of course. You usually need to wait for your ideal plot of land, while developers frequently want to start construction right away. They give in to the temptation of available land and the opportunity to build a project within a short period of time. But I believe that sometimes it pays off to wait a little longer and then build on a site that guarantees success. Every investment project has to be well considered and well prepared.

What is your company doing to retain its position as the market leader?
We will remain at the top spot for as long as we maintain the current quality of our services and customer service standards. Alongside the good locations of our distribution parks, these factors are the greatest assets of Panattoni Europe. When I say customer service, I first of all mean property management. We never outsource this service. Panattoni Property Management handles the administration of all our facilities. This enables us to be in constant touch with tenants and address their needs right away.

Is Panattoni Europe planning to increase employment in the near future?
We currently have just over 100 employees, but the figure keeps changing. We do not have any particular plan to increase employment. We just have a business development plan that is frequently tied with hiring new people.

The gem in your portfolio is Panattoni Park £ód¼, which has received two trade awards. What makes this logistics center stand out among all others?
The project coincided in time with the construction of the Dell factory in £ód¼, which added to the market success of Panattoni Park £ód¼. One of our tenants is Flextronics, a supplier for Dell. Panattoni Park £ód¼ is exceptional in that it is located within the city limits close to the local labor market and main transportation routes. Few projects in industry and logistics can boast a location like that. However, the best of our locations to day is a park in Mys³owice that comprises 190,500 sq m of warehouse space in one of the best locations in Central Europe.

In July, you opened a new branch of your BTS (Built-to-Suit) Group. Are customized projects a vital part of Panattoni's Europe portfolio?
The built-to-suit trend will become even more popular, as a growing number of our potential customers require a special approach to their needs. This is especially true for very large spaces. Our BTS projects include Panattoni Park Poznań I rented by H&M and warehouse space for Leroy Merlin in Stryków and for the DSV company in Teresin.
In the last quarter of this year, we want to concentrate on BTS, so that next year the new branch could boast several completed projects of this kind.

Do BTS projects imply much higher costs and more difficult construction?
Consultations with customers start during the design phase or even before that, during the search for land. Built-to-suit construction is much more complex and takes more experience from the developer than usual. The design and valuation stages usually take a very short time, but for built-to-suit projects, everything can change. We make long-term contracts on such structures, usually for 10 years, the way it is with Leroy Merlin and H&M. If such buildings do not differ much from the standard, we may consider short lease contracts, even for five years only. Still, longer terms benefit both parties. Customers who have been involved in the construction process and negotiated advantageous conditions appreciate the certainty that they will be able to utilize the facility for a longer period of time.

What is the main hindrance for business in Poland today? Is it the poor condition of roads, shortage of land for development or the absence of local development plans?
Our three years of experience on the Polish market shows that the most acute problem for developers is the absence of infrastructure and I do not only mean the roads. Many allotments lack appropriate amenities for large projects. The infrastructure in Poland lags behind the market's growth.

One of your latest projects is called Panattoni Park Gdańsk. What kind of tenants are likely to be attracted by this seaside location?
This is our first facility on the Baltic coast. We are planning to start construction on the first building (15,000 sq m) this October. The entire complex will have an area of 43,000 sq m. The new center will be close to downtown Gdańsk and so we are looking forward to tenants who run local businesses, not only in logistics, but also distribution. I believe the proximity to the container terminal will play a part as well. The new park may become the warehousing base for the terminal.

What are Panattoni Europe's plans for 2009? Poland, the Czech Republic-where else are you planning to invest in Central and Eastern Europe?
Next year we want to enlarge our current locations and expand in Poland, but we will also seek new opportunities in the Czech Republic and Slovakia. Poland, the Czech Republic and Slovakia are our first stage in Central and Eastern Europe, with plans for development in the future. We recently bought 40 hectares of land near Prague, where we will build a 150,000-square-meter distribution center. At the same time, we have been enlarging the D5 Logistics Park in the western Czech Republic. We are also getting ourselves ready for the first Panattoni Europe investment project in Slovakia. We have found a plot of land, but it is too early to be more specific about the project.
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