MLP Group goes from strength to strength, delivering record lease results and generating higher rents
The business of MLP Group remains on a strong growth trajectory. For the first half of this year the Group, developing its operations in Poland, Germany, Austria and Romania, posted its all-time best lease results. During the period, it commercialised a total of 213,700 sqm of space as part of new developments, expansions and renegotiations, whereby existing tenants upsize to grow their businesses or extend lease terms.
Over the first six months of 2022 there was a 91% increase in newly leased space relative to the same period last year, when contracts were signed for about 112,400 sqm.
“The warehouse market stays robust and we are seeing very strong tenant interest in modern space. The primary driver of the market is the growing e-commerce sector, as well as the need to shorten supply chains and move operations to Europe. The pandemic, the war in Ukraine and global supply chain issues have further reinforced the need to secure more storage space. Our record lease results for the first half-year demonstrate that we are benefiting from the global market trends. Our outlook on the future is very bright. We expect continued fast-paced growth in the supply of modern warehouse space. In the segment, we are largely focused on developing urban logistic facilities, which feature small warehouse modules accompanied by office space fitted out to modern standards, located within large metropolitan areas. Such properties are currently most in demand, while offering higher returns on capital,” said Agnieszka Góźdź, Chief Development Officer at MLP Group S.A.
The unremitting demand for modern space, growing at double-digit rates, is coupled with rent growth averaging 15-25% per year across Europe. This more than offsets the rising cost of general contractor services, its growth approximating 10% on average, translating into improved profitability of the business.
The largest boom for modern space offered by MLP Group can be seen at MLP Poznań West. More than 66,000 sqm is currently under construction or in the pipeline, the majority having been pre-leased and a small portion to be delivered on a speculative basis. MLP Poznań West is the fastest expanding logistics centre, which will ultimately provide more than 140,000 sqm of state-of-the-art warehouses and office space. Half of it has already been completed. The project is located on the western side of Poznań, near the S11 expressway, only 7 km from the A2 motorway junction. This excellent location makes it an attractive proposal for various types of businesses.
Environmental aspects and sustainable development are strongly embedded in the developer’s standard practices. MLP Group has been making consistent efforts to minimise its adverse environmental footprint. For instance, it has a project running since early 2022 to build roof-mounted solar PV arrays. It will be the largest ‘on-site’ project of this kind in Poland and the generated solar power will be used mainly to cover the parks’ own needs. The developer maintains its commitment to implementing other sustainable solutions in its logistics parks. In line with the Company’s standard practice, BREEAM certification with a rating of Very Good or higher is obligatory for all its new projects. MLP Group’s sustainability strategy also provides for adapting its existing facilities to meet the green certification requirements.
