A shed load of Panattoni

panattoelement on September 27, 2017

A shed load of Panattoni

Newly formed industrial developer Panattoni has unveiled plans for an aggressive programme of spec development in the UK.

The firm, created this week through the merger of Panattoni Europe and First Industrial, intends to bring 3m sq ft of spec development a year to the supply-starved market and has an initial £300m war chest to deploy in the sector.

The 3m sq ft target is more than the total amount of spec development expected to be delivered in the second half of this year by all the other developers combined. According to GVA, just 2.3m sq ft is likely to be built.

Panattoni Europe chief executive Robert Dobrzycki told Property Week the firm planned to build mega-sheds of up to 1m sq ft without having a tenant in tow and that it expected to become “a substantial player” in the UK market in as little as two years.

“We want to show the market that we are starting something special,” he said. “Nobody is spec developing to any great size. It is a gap in the market that we can grab. There aren’t too many global players building big in the UK market. We can cover the gap between the local developers and the global players.

“We have big ambitions. We want to be volume orientated and customer focused.”

Substantial player in two years

In order to scale up quickly, the firm would bid aggressively to acquire sites as well as buying or partnering with smaller developers, said Dobrzycki, adding that he hoped to replicate Panattoni’s success on the continent where it was the largest developer by volume between 2014 and 2016 – building 29m sq ft of new stock. In Germany the firm established itself as market leader in just two-and-a-half years.

“I don’t know if it is going to be the case in the UK but we want to be at least a substantial player in two to three years,” he said. “If it takes five years that’s OK, there’s no time target, but that is what we are pushing for – to become a substantial player in the UK.”

Dobrzycki shrugged off suggestions that spec building on such a large scale was a gamble in the current market, especially with the wounds still yet to heal from the over-development of spec facilities before the financial crisis.

“It can be viewed as a bit more of a risky strategy, but looking at the demand side we view it as less risky than smaller shed development,” he said. “Ecommerce occupiers are taking bigger spec buildings and larger spec on the continent is doing better than smaller stock. There are similar fundamentals between the two markets.”

Panattoni’s managing director Matthew Byrom said the firm was looking at developing units in the 350,000 sq ft and 750,000 sq ft range as well as having investor backing to build a single 1m sq ft spec shed. “There is a lack of product available nationally yet demand is very strong in the 350,000 sq ft and 750,000 sq ft size band,” he said.

“We want to be ready with available product when the next upsurge of demand comes. We see that we are at the bottom of the curve of the speculative building cycle.”

He added that the business would be recruiting to double or treble the size of its team over the next few months.

Property Week, 22nd September 2017

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UK merger announced

panattoelement on September 20, 2017

UK merger announced

Industrial developer Panattoni Europe will undertake an aggressive £300m spec development programme in the UK after merging with First Industrial.

The new company, named First Panattoni, will speculatively build mega-sheds of up to 1m sq ft across the UK.

Panattoni has raised a first phase capital facility of £300m to spend on the programme and will look to make land purchases, partner with developers or even buy-out developers with the right landbank.

Robert Dobrzycki, chief executive of Panattoni Europe, said: “Our customers and capital partners have been urging us for some time now to move to the UK, however, in the last few years we have been concentrating on volume in mainland Europe.

“Having established Panattoni as one of the largest industrial developers in Europe, our focus now is building a UK business, so we can provide our clients with an integrated pan-European platform with best-in-class development expertise.”

Panattoni said it was realistic about the dynamics of the UK property market, which has many established players and operators.

Dudley Mitchell, director of the Panattoni Development Corporation, added: “The UK market has many similarities to a number of territories we successfully operate in. Limited land supply and a slow permitting process means that land is expensive.

“To penetrate these capital intensive markets, you need to bid aggressively and spec build. We see the UK market with potential for 3m sq ft of new build product a year, but we’ll need to up scale the First Panattoni platform to meet these demands.”

Established in 2009, First Industrial was one of the first new entrants to emerge from the market downturn. The company quickly established its credentials with its first deal being a 1m sq ft build-to-suit for Marks and Spencer, which at 28m high was the largest deal by volume ever delivered in the UK. This was followed by a series of other significant projects, for occupiers such as the Co-op, Sainsbury’s DHL and Amazon.

Matthew Byrom, managing director of First Panattoni, said: “We’ve never been afraid of advancing into new and competitive markets; with recent global uncertainties and the relative weakness of the pound, many of Panattoni’s capital partners will see this as a buying opportunity.

“From an international perspective, the UK still remains a hugely attractive place to invest in real estate, with its long leases and strong balance sheet customers. Couple this with the rental growth we’ve seen across the country, and the continued growth of the e-commerce phenomenon, the interest in this sector is likely to continue.”

Carl Panattoni, chairman of the Panattoni Development Corporation, added: “We’ve always wanted to expand in the UK, but until now, we’ve never found the right partner.

“Having looked extensively within the market, we found that First Industrial had an excellent underlying business and one that reflected our values and business ethos exactly – the merger therefore seemed obvious. Not only is First Panattoni a highly complementary addition to our global network, it also provides the perfect conduit to deploy the weight of capital we have been looking to invest in the UK.”

Property Week, 19th September 2017

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Panattoni ranked No.1 in Europe

panattoelement on September 14, 2017

Panattoni ranked No.1 in Europe

Panattoni is the largest industrial developer in Europe, according to the latest Top Property Developers Ranking by Property EU Magazine. The firm topped the podium in terms of the quantity of space delivered to the market between 2014 – 2016. The staggering 29,176,812 sq. ft of new build warehousing made Panattoni Europe the largest developer of industrial real estate in Europe.

Panattoni Europe is the European arm of US-based Panattoni Development Company, Inc. The privately-owned company, with its Head Office in Newport Beach, California is now the fastest growing industrial developer in the world, as well as No.1 in the annual ranking by Property EU Magazine – a pan-European source of information for commercial real estate professionals.The ranking lists the Top 10 European developers in terms of the quantity of product delivered to the market over a period. This year’s list covered the period from 2014 – 2016, with the title of Top Property Developer going to Panattoni.

In Poland, the Czech Republic and Germany, Panattoni’s impressive performance can be attributed mainly to the rapid growth in the e-commerce sector, as is evidenced by the developer’s biggest deals for companies such as Amazon, Decathlon and H&M / Jago. The last 5 facilities for Amazon alone totalled some 7,350,000 sq. ft. In addition to internet related logistics, manufacturing also accounted for an increasing share of the market, especially in the automotive sector.

Robert Dobrzycki, Chief Executive Officer, Panattoni Europe explains:

“…our first place in the Property EU ranking of Top Property Developers shows that as a developer we are capable of undertaking diverse projects, from small formats to record-breaking platforms….up to 1,750,000 sq. ft in a single facility. Our very successful 2016 followed by a good start to 2017, stimulated by strong growth in e-commerce and the general improvement in economic conditions across Europe, promise that good times are ahead for the warehousing market, both in terms of volume and investor activity.”

Since coming to Europe, Panattoni has delivered more than 50,000,000 sq. ft of modern industrial warehousing and has currently close to 11,000,000 sq. ft under development. The company supports local and national businesses by delivering both speculative and build-to-suit projects, for a wide range of customers. Panattoni also acquires land and secures sites for new strategic developments for client’s such as Arvato, Coty Cosmetics, General Electric, TNT, DSV, BSH (Bosch), Carrefour, Kaufland, Tesco, Castorama, Intermarché, Leroy Merlin, Selgros, ND Logistics, Still, Schenker, Tchibo.

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