CEE Summit: infrastructure a strength of Polish logistics hub

New infrastructure projects are strengthening the role of Poland as a European logistics hub, experts agreed at the ´From Periphery to Powerhouse: How is CEE Redefining Its Role in European Supply Chain & Global Logistics?´ panel at the recent CEE Summit in Warsaw, organised by Real Asset Media and The Poland Observer.

¨Poland has been really smart and invested in infrastructure, because you cannot have a functioning logistic system without proper highways, proper railway lines and proper airports¨, said Roman Kubanyi,  Senior Client Executive | Group Commercial Real Estate, Erste Group Bank. ¨The level of infrastructure is very high and that is why many foreign investors opt for Poland. I even struggle to still place Poland in CEE, because looking at many of the metrics, it is getting much closer to Western Europe. It is doing a fantastic job.¨

Nearshoring, port expansion and major road and rail investment are redrawing logistics

flows and shaping demand for warehouses, intermodal links and transport infrastructure across CEE, with Poland as the anchor. 

¨The super good times might be over, but the good times are still here because Poland has a couple of competitive advantages¨, said Elias van Herwaarden, Founder & Principal, LocationPerspectives. ¨Its people, its  infrastructure, the level of education and skills. Poland is the second biggest manufacturing country in the European Union. Thirty years ago it was about cheap labour, but now the country is competing head to head for big manufacturing projects. I think there is a lot to be proud of.¨

The Port Polska project is set to add another strategic layer to the region´s offering. It has two main parts, a new hub airport near Warsaw and a new 500 kilometre high-speed rail network. The whole project is over 131 billion zloty, or around 35 billion euros.

¨There is also an important third component, which is the master planning for the area around the airport, which is big: we have acquired over 2,500 hectares, compared to the Warsaw Chopin airport area which is 650 hectares¨, said Filip Czernicki, CEO, Centralny Port Komunikacyjny, Port Polska Programme. ¨The project is moving very fast, we will be breaking ground in September, have submitted all the building permits and are now in the process of selecting construction companies and are negotiating with five big consortiums that are about to submit their proposals for the airport terminal as well.¨

As for the rail component of the project, which is twice as big as the airport, is being financed from the state budget. Soon the tunnelling under the city of Lodz will begin for the line that will link the city to Warsaw.

¨Poland is in the heart of Europe, it is a gateway to Western Europe but when the Ukraine war will be over it will also be a gateway to the East¨, said Czernicky. ¨It is a great business opportunity. We are now in talks with financial institutions, with banks to secure the debt for the whole airport component. The European Investment Bank has expressed an interest in being involved in the project.¨

Experts agreed that any location in Poland that has good transport links and is close to one of the country´s many cities is a good place for a logistics investment.

¨Ten years ago logistics was 5 to 10% of our lending book, which was mostly offices and retail¨, said Kubanyi. ¨The majority were offices and retail. Now I would say two-thirds of the projects that land on my table is actually logistics. And in terms of markets, it is always Poland and Romania. This is rather natural because Poland is seen as less risky and also big enough to make sense. if you invest so much effort and energy, you

want to penetrate a relatively large and stable market, which Poland definitely is.

If you want the slightly higher yields, then you go to Romania. So we are now repositioning our book to being nicely divided between one third logistics, one third offices, and one third retail.¨

Interest rates have reshaped capital markets over the past two years, but financing is available for a developer wanting to build a large logistics facility in Poland, delegates heard.

¨The shop is open, come to us and we can talk, we have no restrictions on financing development¨, said Kubanyi. ¨If you have 20-25% of equity, we are happy to provide the rest. We would not finance a totally speculative development, but we can do classic project finance and after the construction phase, when the project is complete then we turn the loan into an investment facility.¨