KRAKOW PORT - Frontier Estates Europe · 2019-10-28 · 10 Waterfront Development Moodboard 32 11...

KRAKOW PORTWATERFRONT DEVELOPMENT OPPORTUNITY

KRAKOW, POLAND

KRAKOW PORTWATERFRONT DEVELOPMENT OPPORTUNITY

KRAKOW, POLAND

Q4 2019

Confidential Investment Summary

WATERFRONT DEVELOPMENT OPPORTUNITY, KRAKOW, POLAND

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KRAKOW PORT

KRAKOW PORT WATERFRONT DEVELOPMENT OPPORTUNITY, KRAKOW, POLAND

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01 Introduction 7

02 Investment Highlights 8

03 Location Highlights 11

04 Focus on Neighbourhood 14

05 The New Music Centre 18

06 Property Access 20

07 Property Facts 22

08 Master Plan Assumptions 24

09 Development Potential 26

10 Waterfront Development Moodboard 32

11 Focus on Krakow 34

12 Krakow at a Glance 36

13 A Capital of Culture 38

14 The City of Innovation 40

15 Office Market in Krakow 42

INTRODUCTION

Savills has been exclusively retained by Frontier Estates (“the Seller”) to offer for sale or JV partnership a ca. 7 ha development site (“the Project” or “Property”) located in Krakow.

Krakow Port is a unique and highly attractive waterfront development opportunity located on the bank of the River Vistula and close to Krakow city centre.

The Project provides an opportunity to develop a mixed-use commercial scheme, with unique river views towards the Old Town of Krakow benefiting from a waterside location.

Lukasz Frominski

Associate Director

Investment

+48 660 438 433

[email protected]

John Palmer FRICS

Director

Head of Industrial Investment

+48 501 203 821

[email protected]

WATERFRONT DEVELOPMENT OPPORTUNITY, KRAKOW, POLAND

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KRAKOW PORT

6

highlightsINVESTMENT

QUICK AND CONVENIENT ACCESSGood access by car and public transport.

Short distance to the historic centre of Krakow.

UNIQUE WATERFRONTDEVELOPMENT OPPORTUNITY

Attractive development site with opportunity to enter into a joint-venture or purchase a landmark

waterfront project.

PRESTIGIOUS LOCATION WITH A RIVERVIEWView onto the River Vistula

towards the Old Town of Krakow.

LEADING REGIONAL OFFICE MARKET

Strong occupiers’ demand, stable rents, relatively high liquidity.

NO. 1 TOURIST DESTINATIONRecord number of visitors, numerous cultural venues.

SIGNIFICANT LEISURE POTENTIALOpportunity to develop a shoreline to create a

one-of-a-kind scheme with significant leisure element (e.g. small marina / barge restaurants, etc).

KRAKOW PORT


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highlightsLOCATION

Krakow Port benefits from quick and convenient access to the city centre and to other districts of Krakow.

VERY GOOD CAR AND PUBLIC TRANSPORT ACCESSThe location benefits from very good car and public transport. The historic centre of Krakow is easily and quickly accessible.

REGIONAL AND INTERNATIONAL TRANSPORTKrakow Port is situated only 6.0 km from the A4 Motorway. The Main Railway Station is located ca. 4.0 km away. Krakow Balice Airport is located west of Krakow, approximately 25 km from the Property.

CLOSE TO THE HISTORIC CENTRE OF KRAKOWOnly 3 km from the Old Town. Kazimierz, one of the most famous tourist destinations of Krakow, is within 2 km.

UNIQUE LOCATION ON THE VISTULA RIVERBANKThe Property is located at 1 Stoczniowcow St, on the bank of the River Vistula. This unique location provides the opportunity to develop a waterfront mixed--use project with offices, small marina and on-water dining facilities.

NEAR THE PLANNED MUSIC CENTRE IN KRAKOWThe Music Centre is an extremely important investment for Krakow, which will be a showcase of the city. The project will include the headquarters of the Philharmonic and accommodate Sinfonietta Cracovia and Capella Cracovien-sis and is expected to be ready in 2024.

SIGNIFICANT LEISURE POTENTIALLocation on the river provides a possibility of numerous leisure activities. The neighbourhood has a high provision of green areas. Tauron Arena, the largest stadium in Krakow, is situated only 4.4 km away.

GOOD ACCESS TO RETAIL AMENITIESM1 Krakow (3.2 km), Krakow Plaza (3.7 km), Galeria Kazimierz (4.0 km), Galeria Krakowska (5.0 km), CH Czyzyny (6.2 km).


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4 km

3 km

2 km

1 km

1. THE OLD TOWN

5. MAIN RAILWAY STATION

2. WAWEL ROYAL CASTLE

3. KAZIMIERZ

4. KRAKOW CONGRESS CENTRE

7. TAURON ARENA KRAKOW

6. THE KRAKOW OPERA

1.

2.

3.

4.

5.

6.

7.

8.

9.9. KOPIEC KRAKUSA

8. THE NEW MUSIC CENTRE

Krakow Port


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neighbourhoodFOCUS ON KRAKOW PORT

GRZEGORZKI DISTRICTDEVELOPING RESI & RECREATIONAL AREA

NA ZAKOLU WISLYAPARTMENTS

LIVINNXSTUDENT HOUSING

ZABLOCIE BUSINESS PARK

DIAMANTE PLAZA OFFICES

FABRYCZNA CITYMODERN OFFICE & RESI PROJECT

ZABLOCIEFAST GROWING OFFICE & RESI DISTRICT

TAURON ARENASTADIUM

WISLANE TARASYMODERN APARTMENTS

GRZEGORZECKI PARKTHE NEW MUSIC CENTRE

ANDRZEJ FRYCZ MODRZEWSKI KRAKOW UNIVERSITY


14 15

ZABLOCIE DISTRICT GRZEGORZKI DISTRICTZABLOCIE DISTRICTA former industrial quarter, intensively revitalised since the beginning of the 1990s, currently one of the most dynamically developing areas of Krakow. While Zablocie boasts a wide array of cultural and historical hotspots, including the Oskar Schindler’s Enamel Factory (a branch of the Museum of Krakow), the area is equally well connected to the city centre. The quarter is home to A. Frycz Modrzewski University of Krakow and Krakow School of Art and Fashion Design. It has also become a popular location for modern residential and office projects.

GRZEGORZKIGrzegorzki was once an industrial district and is now becoming a place with modern, exclusive, apartment buildings, greenery and functional areas for rest and recreation. New public investments are encouraging further development of numerous residential and commercial projects.

3. NA ZAKOLU WISŁY APARTMENTS 6. GRZEGORZKI PARK

1. ZABLOCIE BUSINESS PARK 4. WISLANE TARASY 2.0

2. LIVINNX STUDENT HOUSING 5. FABRYCZNA CITY

ZABLOCIE

GRZEGORZKI

Krakow Port

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3

4

6

5


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music centreTHE NEW

THE NEW MUSIC CENTREOne of the key investments in Krakow to be completed in 2024. It will include the headquarters of the Philharmonic and concert halls of Sinfonietta Cracovia and Capella Cracoviensis. The largest hall will accommodate up to 1,400 visitors. Upon completion, the Music Centre will be a new landmark of Krakow attracting local, regional and international audiences.

The New Music Center will be located on the opposite side of the River Vistula, within Grzegorzki Wschod. Upon completion, the project will further improve attractiveness of the location, generate significant traffic and life on the bank of the River Vistula.

THE NEW MUSIC CENTRE

Krakow Port


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A B C

A

B

C

accessPROPERTY

Krakow Port site benefits from good access to public transport networks providing quick and convenient access to the city centre and to other districts of Krakow.

CARKrakow Port is easily accessible by car. The neighbouring bridge over the River Vistula provides convenient access to the northern part of the City.

BUSThe Property is easily accessible by bus. There are four bus stops situated near the crossroads of Nowohucka and Stoczniowcow Streets. The location is served by six bus lines.

TRAMTwo tram lines (including Krakow Fast Tram) are within one bus stop away from the Property or approx. 10 min walk (850m) using the footbridge.

RAILWAYThe nearest railway stations (Krakow Podgorze and Krakow Zablocie) are situated ca. 2.0-2.5 km from the subject Property. The Main Railway Station in Krakow is located approx. 5.0 km away, while the Krakow Plaszow Railway Station (the second biggest railway station in the city) is located ca. 4 km away.

BICYCLEThere are over 230 km of bicycle routes in Krakow. Bicycle routes and pavements with bicycle traffic are located along Nowohucka Street and on the opposite bank of the River Vistula.

AIRKrakow Balice Airport is located west of Krakow, approximately 25 km from Krakow Port. It is the largest regional airport in Poland. In 2018 the Airport served nearly 52,000 flights and 6.8 million passengers reflecting 16% growth year-on-year. It offers regular flights to 28 countries (81 cities). In 2019 regular flights to 28 new destinations have been launched.

KRAKOW PORT

App

rox.

10 min.

walk

(850

m)

to th

e nea

rest

tram

stop

Fast Urban Railway


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factsPROPERTY

46/1

46/2

46/3

PLOT NO. ADDRESS PERPETUAL BOOK PLOT AREA [ha]

46/1 Stoczniowcow KR1P/00183478/2 1.9440



TOTAL 7.0732

KRAKOW PORT

The second largest Polish city. Top tourist destination. Major academic centre in Poland. Leading regional office market in Poland. Ranked 6th in Tholons Services Globalization City Index 2018.

DESCRIPTIONKrakow Port is situated at Stoczniowcow Street in Krakow and comprises of ca. 7.07 ha. The Property is fenced and has an irregular shape. It consists of three land plots: no. 46/1, 46/2 and 46/3. Part of the site has direct access to an internal water bay being part of the River Vistula. The Property was previously used to construct and repair ships and floating homes.

TENUREThe Property is held under a right of perpetual usufruct valid until 25th May 2091 by a private enterprise.

FLOOD PROTECTIONPolish Water will rebuild the existing flood protection embankment along the site. New embankments and flood protection gates will be constructed on the entrance to the existing port basin. The project will be financed by the World Bank. Polish Water has instructed AECOM to design and procure the project from concept to completion.


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assumptionsMASTER PLAN

EXISITING MASTER PLANExisting Master Plan was voted on 12.03.2014 and covers the entire Podgorze district of Krakow.• Zoning: 2U (approximate area of 5.4 ha) commercial functions,

1WS (approximate area of 1.6 ha) water areas;• Possible development: broad scope of commercial functions

including office development;• Maximum building height – 15 metres;• Minimum of biologically active area – 25%;• Maximum site development ratio – 60%;• Parking ratio – 1 parking space per 30 sq m of building usable area.

ONGOING MASTER PLANOn the 7th November 2014 proposals for a new Master Plan for selected parts of Podgorze district have been initiated. The procedure is now at the last stage and is expected to be passed in Febraury 2020. The main assumptions are as follows:• Main function: U.2 - commercial functions; WS.3 - water areas

(ca 1.6 ha);• Supplementary function: related to inland sailing (harbours, etc);• Maximum building height – 16 metres;• Minimum of biologically active area – 25%;• Max development area: 60%;• Development density ratio: 0.60-2.40;• The project of Master Plan defines area at the junction of

Nowohucka Street and Stoczniowcow Street for a future subway stop;

• The project of Master Plan defines the width of Nowohucka Street (South of the Property) to allow for location of tramway line;

• Parking ratio – 1 parking space per 33 sq m of building usable area; • 10 parking space per 100 rooms.


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potentialDEVELOPMENT

SCHEME 1:Total GLA: 45,040 sq mOffice: 44,410 sq m GLA in 5 buildingsF&B: 630 sq m GLA on the deck facing the water basin (with potential extension within office building)Car park provision: 924 ps including:• surface - 184 ps• semi-basement on the water front - 240 ps on 1,5 levels• basement under the middle building - 500 ps on 1 level

SCHEME 2:Total GLA: 51,215 sq mOffice: 47,000 sq m GLA in 5 buildingsF&B: 315 sq m GLA on the deck facing the water basin (with potential extension within office building)Car park provision: 960 ps including:• surface - 20 ps• semi-basement on the water front - 240 ps on 1,5 levels• multi-storey car park - 700 ps on 1 level

PRINCIPLES AND ASSUMPTIONS:• The slipway on the Property going down to the water basin is used

as semi-basement parking structure (open subject to further design) which creates a platform for the buildings above and serves as flooding protection measure

• The water basin is considered a biologically active area which can be included in the Property balance calculation (25% area required as biologically active)


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SCHEME 1

Office Floor GFA No of floors Total GFA Efficiency Total GLA Cars/1000sq m GLA Parking spaces

Buildings A-E 40,560 33,240 20 665

Building I 1,800 4 7,200 82% 5,900 20 118

Building A extension 700 4 2,800 82% 2,290 20 46

Building D extension 910 4 3,640 82% 2,980 20 60

Total 54,200 44,410 888

F&B Floor GFA No of floors Total GFA Efficiency Total GLA Cars/1000sq m GLA Parking spaces

Building F 350 1 350 90% 315 25 20.00

Building G 350 1 350 90% 315 25 20.00

Total 700 630 40

TOTAL 54,900 45,040 928

Parking provision

Surface Basement under buildings

Open semi- basement level -1


TOTAL

188 500 160 80 928

CAR PARKING


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SCHEME 2

Office Floor GFA No of floors Total GFA Efficiency Total GLA Cars/1000sq m GLA Parking spaces

Building A 2,690 4 10,760 82% 8,820 20 176

Building B 2,340 4 9,360 82% 7,670 20 153

Building C 2,410 4 9,640 82% 7,900 20 158

Building D 1,250 4 5,000 82% 4,100 20 82

Building F 1,460 4 5,840 82% 4,780 20 96

Building G 1,670 4 6,680 82% 5,470 20 109

Building H 1,080 4 4,320 82% 3,540 20 71

Building I 1,440 4 5,760 82% 4,720 20 94

Total 57,360 47,000 940

F&B Floor GFA No of floors Total GFA Efficiency Total GLA Cars/1000sq m GLA Parking spaces

Building E 350 1 350 90% 315 25 20.00

Total 350 315 20

Hotel

Building J 1,040 5 5,200 75% 3,900 5

Total 5,200 3,900 5

TOTAL 62,910 51,215 965

Parking provision

Surface Multi-storey car parking



TOTAL

25 700 160 80 965

CAR PARKING


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moodboardWATERFRONT DEVELOPMENT

HOTEL NHOW, BERLIN Port, WASHINGTON DC

ONE GLASS Port, TEMPLE QUAY, BRISTOL

AKER BRYGGE, OSLO

AKER BRYGGE, OSLO


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KrakowFOCUS ON

The second largest Polish city. Top tourist destination. Major academic centre in Poland. Leading regional office market in Poland. Ranked 6th in Tholons Services Globalization City Index 2018.


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at a glanceKRAKOW

THE 2ND LARGEST CITY IN POLAND BY POPULATION

RANKED 6TH

IN THOLONS SERVICES GLOBALIZATION CITY INDEX

CITY OF CULTUREEUROPEAN CAPITAL OF CULTURE

IN 2000

THE LARGEST REGIONAL OFFICE MARKET

IN POLAND

TOP DESTINATIONFOR OUTSOURCING

IN EUROPE

LEADING TECH-CITY IN POLAND

CITY OF INNOVATIONHOME FOR 200+ START-UPS

AND INNOVATION HUBS

THE 2ND LARGEST ACADEMIC CENTRE IN POLAND

160,000 STUDENTS57,000 GRADUATES

UNESCO WORLD HERITAGE SITE

13M VISITORS P.A.MAJOR TOURIST DESTINATION IN POLAND

770,000 INHABITANTS


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of cultureA CAPITAL

CULTUREKrakow is Poland’s capital of culture. The city boasts world famous museums and well-known theaters. It is home to one of the world’s oldest and most distinguished universities. It is home to a number of Poland’s top writers, painters, and musicians. Krakow was named a European City of Culture in 2000 and since 2013 UNESCO has proclaimed Krakow the City of Literature.

TRAVELKrakow with nearly 13 million visitors per annum is a major tourist destination in Poland and one of the country’s most ancient cities, with history dating back to the 7th century. The town is in the UNESCO`s list of World Heritage Famous monuments. Its famous landmarks such as Wawel Royal Castle, St. Mary’s Tower and Jewish Kazimierz bring tourist from all over the world. Additionally in 2017 Krakow won the Zoover Award for Best European City Trip 2017 for the fourth time in a row, placing it higher than cities such as Sevilla, Barcelona and Vienna.

SPORTKrakow has a great sporting tradition and is home to two famous football clubs: Wisla Kakow and Cracovia, both with modern stadiums. Tauron Arena is one of the biggest modern entertainment and sports venues in Poland, that often hosts different international sports events. Krakow is also famous for its ice hockey traditions and Cracovia is one of the most titled Polish hokey clubs.

RETAILKrakow is one of Poland’s leading retail centres and holds the reputation of one of the best places to shop in the country. Modern shopping centres Galeria Kazimierz and Galeria Krakowska and older malls on Florianska Street are well known.

BUSINESSKrakow is one of the largest business centres in Poland. The city is the biggest Polish BPO/SSC location and accounts for 8.7% of total headcount at business services centres in Poland with 70,000 employees in 217 centres. A favourable business environment and access to large pool of skilled workforce make Krakow a strong location for multiple world-wide companies such as Shell, UBS, HSBC, AON, Nokia and many others, who have chosen Krakow for their offices location.

LEISURECracovians are spoiled with recreational opportunities. The world famous attraction is the Old Town. There are green areas including Planty and Blonia, the latter of which is home to an ice rink in winter. Other areas include Las Wolski (Wolski Forest), which is home to Kosciuszko and Pilsudski Mounds, as well as the Zoo, and provides plenty of hiking opportunities.

NIGHTLIFEKrakow undisputedly holds the title of the partying capital of Poland, its Main Market Square has the highest number of pubs per square kilometer in the world. The musical scene in Krakow is packed with impressive clubs and concert halls, that offer a variety of music performances. Krakow is also the home to one of the biggest Polish music festivals.


38 39

160kStudents

12.8kNumber of new jobs in the period

from Q1’16 to Q1’18

1Krakow - the leading business

services location in Poland by headcount

57kGraduates

195Number of BPO, SSC, IT and R&D

centres in Krakow in 2018

23%Share of Krakow in the total

headcount in BPO, SSC, IT and R&D centres in Poland in 2018

22Colleges and universities

328Average headcount at business

services centres in Krakow in 2018

64kHeadcount in BPO, SSC, IT and R&D

centres in Krakow in 2018

of innovationTHE CITY

• The second largest city in Poland with a population of ca. 770,000.

• Major tourist destination in Poland with nearly 13 million visitors per annum.

• The second largest academic centre in Poland, with 22 universities and colleges, ca. 160,000 students and 57,000 graduates, providing excellent access to highly-skilled labour.

• Ranked 6th in Tholons Services Globalization City Index in 2018, top destination for outsourcing in Europe.

• Top regional business services centre in Poland 64,000 employees, a 23% share in the employment in the industry in Poland.

• City of innovation, home for over 200 start-ups, modern hubs and many technical and economic events.

• Technological centre of Poland. The Krakow Technology Park (KTP) has for years championed the perception of Krakow as a modern city with great conditions for the development of technology firms.

• The largest regional office market in Poland with more than 1.2 million sq m of modern office space.


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marketKRAKOW OFFICE

Krakow is the largest regional office market in Poland with total modern office stock of approximately 1.35 million sq m. It is a destination of choice for many international tenants as well as investors targeting office assets outside Warsaw.

EXISTING OFFICE STOCKKrakow is the largest office market outside of Warsaw. Total modern office stock stood at approximately 1.35 million sq m at the end of June 2019. Office supply in the city centre is rather limited due to its historic nature and low availability of undeveloped land.

The highest office concentration is along major city arteries (Armii Krajowej Street, Jana Pawła II Avenue, Lublanska Street, Puszkarska Street, Kamienskiego Street, Dekerta Street and Bobrzynskiego Street as well as in Zabierzow District.

NEW SUPPLYNew supply accounted for 90,000 sq m in the first half of 2019. Total supply under construction amounts to nearly 180,000 sq m, of which approximately 51,500 sq m will be completed by the end of the year.

TAKE-UPDemand for office space in Krakow is strong with BPO and SCC sectors leading in terms of total volume of leased space. In the first half of 2019 nearly 135,000 sq m of office space was leased in Krakow. 5-year average net absorption amounted in 2014-2018 to approximately 122,000 sq m p.a.

RENTSPrime headline rents are in the range of EUR 13.50 – 15.00/sq m/month and some upward trend has been noticed in a past few months.

INVESTMENT MARKETInvestment activity in Poland is high, which was reflected in last year’s record volume of transactions of approximately EUR 7.2 billion (ca. 40% growth year-on-year). The office sector is the major target for investors, attracting buyers with strong letting activity and relatively low rents with some growth prospects. Regional office markets provide investors with opportunities to invest in assets of various lot size and good covenant strength.

PRIME YIELDS Prime office yields in leading regional markets in Poland (Krakow and Wroclaw) are in the range of 5.50% - 5.85% (and expected to compress further) which reflects ca. 100-150 bps yield premium compared to similar assets in Warsaw.

LIQUIDITYKrakow is considered to be the most liquid office regional market in Poland with a number of acquisitions being concluded every year. This year is expected to close with at least EUR 250 million invested in offices in Krakow with some further large transactions to be closed in early 2020.

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OFFICE TAKE-UP IN KRAKOW

MODERN OFFICE STOCK AND NEW SUPPLY IN KRAKOW

INVESTMENT VOLUMES IN THE OFFICE SECTOR

1.35 million sq mMODERN OFFICE STOCK

142,000 sq mESTIMATED NEW SUPPLY IN 2019

178,000 sq mUNDER CONSTRUCTION

10.0%AVERAGE VACANCY RATE

207,000 sq m /annumTAKE-UP (3-YEAR AVERAGE)

EUR 13.00-15.00 /sq m/monthPRIME HEADLINE RENTS


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KRAKOW PORT

44

John Palmer FRICS

Director

Head of Industrial Investment

+48 501 203 821

[email protected]

Investment

Łukasz Fromiński

Associate Director

Investment

+48 660 438 433

[email protected]

Savills plc: Savills plc is a global real estate services provider listed on the London Stock Exchange. We have an international network of more than 600 offices and associates throughout the Americas, the UK, continental Europe, Asia Pacific, Africa and the Middle East, offering a broad range of specialist advisory, management and transactional services to clients all over the world. This investment summary is for general informative purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. While every effort has been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form is prohibited without written permission from Savills.

For further information please contact:

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