Polish logistics warehouse purchase for €24.5 million
In March 2019 the Company completed the acquisition of a freehold logistics warehouse near Krakow, Poland for a net value of €24.5 million. The vendors were Panattoni and Marvipol, well-known international real estate developers specialising in logistics.
Only built in 2018 the asset is a freehold, multi-let, facility located in an established logistics area alongside the A4 motorway giving access to Germany, Wroclaw and Silesia and also benefitting from its proximity to Krakow and Katowice international airports. The building provides 31,000 square metres of warehousing and 4,000 square metres of office space with ample loading docks, a free height of 10 metres and a floor load capacity of 5,000 kilograms per square metre. The flexible structure allows for future reconfiguration if required.
The warehouse has an attractive income profile being fully leased to nine tenants, all with CPI indexed leases and with a weighted average unexpired lease term of 4.6 years (calculated as at 1 March 2019). Currency risk to the Company is limited with all rents payable in Euros. Tenants include packaging and transportation company DS Smith and Lynka, a leading provider of textile printing services.
Krakow is the second largest city in Poland with approximately 760,000 inhabitants and is characterised by a relatively affluent population, the dominance of added value industries and a strong education infrastructure and business friendly policies. It is located in the south near the border with the Czech Republic and is, after Warsaw, considered to be Poland’s most important and fastest growing economic centre. Warehousing remains scarce in the area with an undersupply of logistics assets due to the scarcity of available land, fragmented ownership and often complex permitting.
The Polish logistics market is strong and currently ranked third in Europe in terms of new developments benefitting from being the largest economy within the Central and Eastern European block with a lower cost labour force.