MLP joins the millionaires’ club

Agnieszka Góźdź, sales director, MLP Group: Our portfolio will exceed 1 mln sqm of warehousing in Poland this year. Furthermore, we are growing rapidly in Germany and aim for our portfolio there to reach a similar size in the next 2–3 years. We also plan to make our first deal in Austria this year.

Perhaps let’s start with your Polish plans. Central Poland has recently joined your four main locations – Warsaw, Poznań, Wrocław and Upper Silesia. How do you intend to develop on this market?

We sealed an agreement to buy the land in Łódź four years ago, in April 2016. However, the agricultural land legislation prevented us from finalising the purchase of it. We then had to wait until 2019 for the zoning plan to be passed, which finally allowed us to acquire the property. Thus we gained an ideally situated plot on ul. Ofiar Terroryzmu in Łódź at its 2016 price. In addition to this, we still have app. 50 ha reserved in Stryków and hope to finalise the purchase of this property this year. It will be a large, modern, class A warehouse park of around 250,000 sqm.

MLP has three parks near Warsaw: Pruszków I and II and Teresin. What are your further development plans for the capital city’s market?

MLP Pruszków I as well as the MLP Teresin complex are ready and fully leased. MLP Pruszków II has been enjoying the greatest popularity among our current and potential tenants for several years. Its target area is ​​297,000 sqm, more than half of which are buildings that are already completed. This is a very well-connected park near a large metropolis.

You have two parks around Poznań. What changes are you planning there?

Last year we purchased another plot of land in Dąbrówka for the construction of MLP Poznań West. Our latest project there is a centre with ​​a target area of 83,000 sqm, near the S11 road and the A2 motorway. Its first tenant, Inpost, moved in just last September. Right now we are completing the construction of the second warehouse, of around 10,000 sqm. In addition to that, as part of our urban logistics development activities, we’re also preparing the app. 20,000 sqm City Logistics project in the very centre of Poznań. This will be aimed primarily at e-commerce companies, whose operations specifically require an urban location of a superior standard.

Are you also planning to buy land in Wrocław?

Yes we are. We are already the owner of MLP Wrocław park with around 67,000 sqm, which is almost 80 pct leased. Therefore we have decided to begin the development of another centre – MLP Wrocław West with a total of ​​70,000 sqm on ul. Mokronowska on the south-western outskirts of Wrocław. The first contract has already been signed and the hall should be delivered to the client as early as October.

Your other markets are Upper Silesia and Lublin. What are your plans for these places?

We are equally busy in Upper Silesia. This is a region that has recently been developing very rapidly economically because of its good transport infrastructure, qualified workforce and a huge interest from Western investors, among other factors. We have two parks there: MLP Gliwice, which is 100 pct leased, and MLP Czeladź, which still has significant expansion potential – up to around 50,000 sqm. Next year we intend to buy two additional locations in this region. As far as Lublin is concerned, our MLP Lublin centre has also been leased and more than 47,000 sqm is fully occupied by tenants, while the average rental period in this park is more than ten years. We are also considering expanding our operations in this area, having already reserved a potential plot and opened negotiations with potential tenants.

Why doesn’t MLP win contracts for large–scale projects, such as warehouses for Amazon?

Because we’re not interested in such large deals. We’re not in the race for square metres. Large transactions that give us net assets of a much reduced value, since they have much lower rental rates than contracts for 5,000 sqm, 10,000 sqm or 15,000 sqm. Such deals may be excellent PR material, but we need to bear in mind that MLP is a listed company and so its main task is to generate profits for its shareholders. It’s true that we take part in tenders for projects of around 80,000 sqm or 100,000 sqm, but we can see that these projects are signed at really low rents. So our focus is on transactions in our own parks, which offer areas of around 70,000–150,000 sqm, and we prefer them to be leased by different tenants. We have good contracts and the average length of our contracts is eight years.

What will 2020 be like?

Given the rapidly growing demand for small and medium-sized warehouse space across the country and abroad, I’m convinced that 2020 will be an even better year for our company and we will certainly rent out more than 200,000 sqm. We will always be able to find enough tenants to absorb such an amount of space and so I’m not worried about this at all. Last year MLP Group signed leases for almost 300,000 sqm in three countries: Poland, Romania and Germany.