SEGRO

Due to the strategic location in the heart of the continent, Poland is an attractive investment location. The country is a large consumer market as well as the gate to the other European markets. It’s not surprise then that today Poland is the 9^th biggest industrial market in Europe with a healthy potential to grow further.

One of the main growth factors is the constant improvement of the Polish road infrastructure. Additionally Poland offers favourable investment conditions for companies looking to expand or relocate in Europe, labour as well as social security costs remain low in comparison to the Western countries and local employees are seen as skilled and highly motivated.

In 2017 Polish industrial market noted exceptional demand of almost 4 million sqm of gross take up. The main driver of growth is the e-commerce sector. Also SEGRO took advantage of e-commerce development and in the second half of the year delivered 30,400 sqm of modern warehouse space at SEGRO Logistics Park Stryków for Arvato Poland where e-commerce processes are supported for Poland’s giant fashion retailer LPP S.A.

Poland is becoming an important hub for international players. The structural drivers of demand in the industrial market (urbanisation, growth of the digital economy and e-commerce) are likely to underpin occupier demand for some time to come. New markets will emerge in the future due to the road infrastructure development.

Investor appetite for prime warehouses remains unsated and last mile delivery and light manufacturing are becoming more popular as an investment asset class.

SEGRO portfolio is in a strong position, we are well capitalised, and we enter 2018 with confidence. We remain focused and disciplined in our capital allocation, active asset management and a prudent approach to financing. We strongly believe that our modern and well positioned portfolio coupled with strong market fundamentals, will offer significant opportunities for SEGRO growth in Poland. Our warehouses are occupied by a diverse range of customers and businesses and we will continue to respond to their needs. E-commerce and digitalization are likely to underpin occupier demand in particular for urban warehousing in major conurbations like Warsaw and we will focus on growing our exposure to that sector.

Comment by Bożena Krawczyk, SEGRO Investment Director Central Europe