7R breaks its record for space under construction and strengthens its position on the Polish warehouse market
2020 was a landmark year for the warehouse industry, which in the face of the global pandemic turned out to be one of the strongest branches of the Polish economy. Summaries for last year show that Poland was the number two European market (after Germany) for commissioning warehouse space, as well as number three on the continent for leased space. 7R, the only Polish industrial and warehouse developer to be in the Polish sector’s top three, summarizes its results for 2020.
7R has been active on the Polish warehouse market since 2008. In 2020, it leased a total of 406,895 sqm in 51 deals, with close to 97% of this total being new agreements.
At the end of December 2020, the volume of warehouse space under construction at 7R totaled 361,000 sqm, increasing year-on-year by 30% and, according to JLL, allowing the company to climb from third to second position in Poland’s warehouse sector. In terms of space delivered last year, 7R maintained third place in JLL's ranking, delivering 18 buildings in 14 developments with a total volume of 180,500 sqm.
Year after year, our company records regular increases in leased space of around 35%. We are building large-scale logistics parks, as well as city warehouses which are part of 7R’s City Flex Last Mile Logistics network. Two-thirds of the space leased in 2020 were pre-lease agreements. Thanks to this model of cooperation, we were able, in the best possible way, to adapt the space to the individual needs of our clients. Last year also confirmed that tenants increasingly appreciate the high, ecological standard of warehouse investments. We have the experience and competence to deliver such space. We have also met our clients' expectations by increasing the clear height of buildings in logistics parks to 11.7 m, which of course increases storage possibilities, says Tomasz Lubowiecki, President of 7R.
An example of the importance of clear height in the warehouse sector is the largest contract on the Polish market in Q3 2020, which 7R signed as part of the BTS project for Żabka, the largest convenience store chain in Poland, in Radzymin near Warsaw. One of the buildings of the new Żabka distribution center is a high bay warehouse with a height of 40 m. The center has also been designed to reduce its carbon footprint. The facility will be powered by green energy from photovoltaic panels and will also benefit from smog absorbing materials and anti-smog towers.
An important step towards eco-friendly construction
7R proved in 2020 that the prospect of buildings being self-sufficient in energy is now a reality. Last year, in Balice near Krakow, 7R delivered an office and laboratory building for BWI Group, a company dealing with the design and production of car suspension parts. The building, thanks to a trigeneration system, produces enough energy for power, heating, cooling, and ventilation purposes.
7R wants to develop its best practices in the area of green building. Last year, the company was the first warehouse developer to join the Proptech Foundation, with the goal of developing and implementing technologies that will help reduce the carbon footprint of warehouse facilities across Poland.
Strength in the team
7R relies on a strong team, and collaboration with the best commercial real estate experts in the country. In 2020, the number of 7R employees increased YOY by 54%. 2020 saw a number of professionals join the ranks of the company's warehouse business. Among them, Michał Ulasiński, who took the position of Head of Architecture and leads an internal team dedicated to the design and architecture of industrial and warehouse buildings.
Tomasz Żak, who leads the asset and property management department also came on board last year. The company currently manages a property portfolio of more than 700,000 sqm across Poland.
At the end of 2020, the company announced that Chris Zeuner, after a successful year as a non-executive director at 7R, was to become chief investment officer and a member of the company's board of directors. In his new position, effective January 1, Chris is responsible for 7R's continued expansion, which includes plans for the Polish company to enter new European markets.
The development of the market, and therefore for our business, requires us to revise our strategy and to build a strong team to meet the new challenges that lie ahead. It is crucial that the presence of warehouses in urban and suburban spaces fits in with both the surroundings and the lives of local communities. We very much feel responsible for the impact that development activity has on the environment. To illustrate our commitment to this, our team of architects has now come up with a new façade for 7R facilities which is both pleasing on the eye and blends in well with 7R locations’ surroundings, adds Tomasz Lubowiecki, President of 7R.
Plans for 2021
In 2021, 7R plans to deliver facilities totaling approximately 600,000 sqm, with another one million sqm of investments that are at different stages of the development process.
If necessary, we are ready to respond flexibly to market requirements and undertake the commencement of new projects. We have a land bank, building permits and a team with great experience, so we can build quickly and to the highest standards. We are going to strengthen our presence in Warsaw and in central Poland, as well as in Upper and Lower Silesia, Western Pomerania, and in the east of the country. We are investing in new locations, as well as expanding in existing ones. I believe that 2021 is going to be a very exciting year for 7R, sums up Bartłomiej Krawiecki, Member of the Board, Head of Development at 7R.