A Brilliant Portfolio of Properties in Key Locations – SEGRO’s 15 Years on the Polish Warehouse Market. Magdalena Szulc, Managing Director, Central Europe at SEGRO
At the end of last year it’s been 15 years since SEGRO entered the Polish warehouse market. What, in your perspective, has changed in the industry during these 15 years? And what have been the biggest milestones for your company?
During these 15 years, the Polish warehouse market has undergone a huge evolution, if not a revolution. If we compare 2005 and 2020, only in terms of supply and demand, it is impossible not to notice the significant growth – the total stock of modern warehouse space has increased more than tenfold and the rented space, in square metres, has increased eightfold. However, the changes that have taken place in this sector over the last dozen or so years are not just numbers, although of course we are happy about them as they illustrate the metamorphosis that has taken place in the industry. Due to the availability of well-trained staff, the GDP growth and Poland’s locational advantages, the warehouse market had a chance to develop considerably, and the importance of logistics and industrial assets grew along with it. New formats have also emerged and are gaining popularity, at first mainly big boxes. Today, more and more investments in the urban fabric, so-called city logistics warehouses and cross-dock facilities are appearing. The elements that have revolutionized our industry certainly include new technologies – PropTech has taken the market by storm, helping to optimize many processes, but also reducing labour costs. We also need to mention the increasing ecological sensitivity, as the industry has become much closer to the pro-environmental approach.
What, over that time, have been the biggest milestones for your company?
Every year is a big progress for SEGRO. We started our business in 2005 and today we are the third largest developer in terms of warehouse stock and we continue to grow. We enjoy the trust of our customers who appreciate the quality we deliver and our partnership approach. These are the values on which we have built and will continue to build our position in key markets.
Where is the sector now and what does its future hold? There is so much talk about the growing interest in online shopping and the development of e-commerce – does this translate into the condition of the warehouse market?
While the pandemic has been, and continues to be, a significant factor affecting the health of commercial real estate in recent months, the warehouse real estate market has shown a relatively high degree of resilience to this turbulence. The rapidly growing e-commerce sector has played a major role in this, generating demand for warehouse facilities while increasing the focus on aspects such as last mile logistics and the need to shorten supply chains. E-commerce has become a permanent fixture in the warehousing industry and we do not see its share decreasing. In such a situation, providing companies operating in this sector with facilities that ensure efficient handling of shipments as well as returns and proximity to the end customer will prove to be one of the key issues. On the other hand, logistics and light manufacturing are also growing steadily: products and semi-finished goods that we later buy online have to be manufactured and then delivered to us. These customer sectors have also coped quite well with the new reality, generating additional demand for warehouse space.
From the perspective of a warehouse real estate developer, in which projects is it profitable to invest now? And is there a customer group which, in your opinion, will particularly need your support this year?
In addition to the aforementioned e-commerce sector, which is recording successive growths and will continue to develop and require warehouse space, it is worth mentioning the logistics and manufacturing sectors which, in order to diversify their supply chains and locate their operations closer to sales markets, will be looking for facilities which will provide them with such an opportunity. Sectors such as automotive, DIY or pharmaceutical are also developing, and therefore will ultimately need larger warehouse space.
What trends will reign in warehouse spaces in the near future? Will the pandemic situation accelerate their implementation?
One of the leading trends that has recently been rapidly developing in warehouse space is PropTech, i.e. a range of technological solutions implemented in real estate. Implementation of innovative technologies is associated with greater efficiency – both at the stage of design and construction of the facility and during its subsequent management and operation. Moreover, it promotes process and cost optimization. Green construction and ecological solutions in warehouse properties will be further strengthened.
To what extent do you think that ecology in warehouse real estate is a fashion and to what extent a necessity? Do customers often ask about ecological solutions used in your facilities and what can you offer them?
It is certain that ecology is no longer a fad and eco-solutions are an absolute “must have”, also in the warehouse market. Sustainability investments offer a spectrum of opportunities that cannot be overlooked – from cost optimization of projects, through facility operation to creating a friendly working environment. At SEGRO, every year we pay more and more attention to the natural environment, introducing eco-solutions in our logistic parks. One of them are chargers for electric cars and hybrids, which we hope will contribute to the reduction of emissions. In total, in 17 parks we have installed 30 devices, and the vast majority of them have two charging sockets. Another state-of-the-art solution are solar panels installed on the roofs of all our security rooms and smart benches with solar panels that are operational in several of our parks. We were also the first warehouse developer to launch a bee initiative – we have already installed apiaries in three of our parks. BREEAM certification of all newly built facilities is also a standard in our case. What is important, companies see the opportunities offered by sustainable construction both in terms of better economic balance and care for our planet, and more and more often ask us to recommend ecological solutions.
Let’s talk about SEGRO’s upcoming plans. What year will it be for the company?
In line with our strategy, we plan further growth in five key locations: Warsaw, Łódź, Poznań, Wrocław and Upper Silesia. Moreover, this year we plan to focus strongly on city investments. We have already started work on a new part of SEGRO Business Park Warsaw, Żerań. Both this park and the land we are looking at in Warsaw and other cities will be very important for the developing urban logistics. We are still thinking about expanding our portfolio and we focus on growth through development projects and acquisitions. We are constantly looking for new land and preparing our locations for a smooth construction process and fast commercialization. In the near term, we will continue our strategy with a focus on green solutions and PropTech. We hope that, as before, SEGRO will continue to create space for its customers that offers unique opportunities.
Magdalena Szulc has been with SEGRO since the end of 2005, i.e. since the company’s start in the region. In 2009 she was promoted to the position of Managing Director for Central Europe. She is responsible for managing operations in the region and for implementing the company’s strategy based on the development and expansion of the logistics and industrial property portfolio in key locations. She has over 19 years of experience in real estate industry, confirmed by RICS certification.
Last Updated on May 19, 2021 by Karolina Ampulska