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The Digital Revolution in Real Estate

Insight Summit — CEEQA@Mipim, 11th March 2014

Online shopping the death of bricks & mortar retail?

6L1A0891Online retail is in the foot hills of its evolution and pioneering stages of development, it is virtually impossible to imagine what it will look like 20, 30, 100 years the same way the same way we couldn’t imagine email, the internet and smart phones 30 years ago − but one thing is certain, it will need exponentially more distribution centres, and different kinds of distribution centres and storage centres to those we know today, while traditional shopping centres are going to need to adapt significantly, at significant investment outlay, to keep pace, or to survive.

  • Key Note
    • Raimund Paetzmann, Director EMEA Real Estate, Amazon

      Raimund Paetzmann, Director Real Estate heads EMEA Real Estate team and leads all expansion projects within Amazon’s Fulfillment, Transportation and Customer Service Network. Raimund is responsible for driving a Pan European approach, to ensure the Development is aligned and integrated with the Amazon.com global Initiatives. He his involved in the strategic network planning and he and his teams coordinate the search for all new EMEA location (Fulfillment Centers, transportation hubs and Customer Service Centers) and oversee all necessary negotiations with developers and Governmental bodies.

      Raimund Paetzmann rejoined Amazon EU in 2005 (he was already in charge for Amazon.de between 1999 and 2002) and was a significant contributor to the design of the new generation of EU Fulfillment Centers. So far he has been in charge for searching and securing 27 FC’s totaling in more than 2,000,000 m² Warehouse space in Europe. 1,600,000 m² out of that were built to suit agreements. He and his team were also responsible for six Customer Service building projects cross Europe and Morocco.

      Prior to his work at Amazon EU, Paetzmann gained 2 ½ years experience as a Regional Manager for South Germany with Difa Deutsche Immobilien Funds AG (Union Investment). Paetzmann also brings an additional 5 years experience as a Managing Director of a middle sized project developer and property manager in Munich.

  • Panel 1: The Tenant Picture
    • Alan Colquhoun, Head of CEE, DTZ

      Alan Colquhoun is DTZ’s Head of Central & Eastern Europe based at the Warsaw office and have day-to-day responsibility for DTZ’s Polish business. Alan, who returned to DTZ Poland in April 2013, previously headed DTZ’s Polish business from 1999 until 2009 and was responsible for Central Europe after 2006. He also spent six years at DTZ in the Czech Republic and has worked at DTZ in Canada and the UK. Alan is a Member of the Royal Institution of Chartered Surveyors (RICS).

    • Gerhard Dunstheimer, Deputy CEO, ECE Projektmanagment

      Gerhard was appointed Deputy CEO of ECE in 2009. Prior to this he was Managing Director for Project Development of ECE since 2006, Deputy Managing Director of ECE since 2004, and was previously Divisional Head of Leasing for the North and North-East since 2002. He joined the company as Assistant to the CEO in 1998.

      Prior to joining ECE, Gerhard was a Consultant at INTES Zürich in Switzerland. He studied economics at WHU Koblenz (Germany), LUISS Rome (Italy) and PennState University Philadelphia (USA). He obtained a degree in economics from the University of St. Gallen (Switzerland) in 1996. He is currently a member of ULI, ICSC, GCSC and ZIA.

    • Hadley Dean, Chief Executive Officer EMEA, (MRICS) Compass Offices

      Hadley joined Compass Offices in 2015 with a remit to open 80 high specification serviced office centres within Europe, Middle East and Africa during the next 3 years. Prior to joining Compass, Hadley was Managing Partner Eastern Europe for Colliers International, having joined the firm in 2001 as Managing Director for Poland, where he enjoyed considerable success building the business in all areas across the CEE, SEE, Russia and CIS regions.

      During Hadley’s tenure with Colliers International the company was awarded the key industry award, CEEQA, in 2004 and each year from 2009 to 2014. He is a member of Young Presidents Organisation and a Member of RICS.

    • Otis Spencer, President, Peakside Polonia Management

      Otis was hired in September 2013 as the President of the Board of PPM. He is responsible for the asset management for Polonia I and Polonia II, the origination and execution of new business in Poland, as well as the managerial oversight of Peakside’s office in Warsaw. He has over 20 years of experience in the real estate industry and has executed transactions and functioned as a fiduciary in North America, Europe and Asia. He was until recently the Co-Head/Managing Director of KSP Real Estate Investment Management. From 2005 to 2012, Mr. Spencer was active as Managing Director/Co-Head Europe and member of the Investment Committee with Heitman. During this time he directed the Portfolio Management for Heitman’s European Private Equity group and was the Portfolio Manager for Heitman European Property Partners IV. In addition to his portfolio management responsibilities, Mr. Spencer was active in originating transactions and capital raising efforts as well as contributing to the strategic development of Heitman’s European platform.

      Prior to Heitman, Otis worked for ABP Investments (“ABP”) in the Netherlands where he was a Senior Portfolio Manager. In this capacity, he was responsible for sourcing, structuring and managing non-listed real estate investments on behalf of ABP’s European and Asia Pacific Strategic Funds. During his time at ABP, Mr. Spencer identified and completed ABP’s first real estate private equity investments in Central Europe and Asia. Otis graduated from the University of California Berkeley with a master’s degree in business administration with a concentration in finance and real estate. He also has master’s degree in real estate designation from the Universiteit van Amsterdam. Mr. Spencer holds a dual citizenship from the Netherlands and the United States, and is based in Warsaw, Poland.

    • Robert Dobrzycki, Chief Executive Officer Europe, Panattoni Europe

      Robert set up Panattoni Europe’s headquarters for the CEE region in Poland in 2005 and in 2014 he was appointed CEO for Europe. In 11 years under Robert’s management the company has developed 3.2 million sqm of warehouse and industrial space out of existing stock of 10 million sqm in Poland. Since 2007 PE has been the most active developer on the Polish market year by year with a 2% average vacancy rate of portfolio under management, the current portfolio under management totaling 1.3 million sqm.

      Robert began his career with Menard Doswell & Co., an industrial real estate development company, had has over 15 years experience in the real estate business. He is a Warsaw University graduate and has a Masters in Business Management degree.


So said Amazon’s EMEA Real Estate head Raimund Paetzmann, and so said a panel of international commercial real estate and retail experts at the 2014 CEEQA@Mipim Insight Summit in Cannes.

Fast & loose

Online retail is expanding in developed economies more rapidly than the current stock of distribution space can handle, let along the right kind of distribution space for efficient distribution to major urban conurbations which are the principal source of demand. Including in Central & Eastern Europe where current take-up is a fraction of take-up in leading markets like USA and UK.

6L1A1057“Amazon is experiencing customer dissatisfaction rates of more than 50%, not because our prices are too high but because of the efficiency of current distribution channels,” claimed Paetzmann, foreseeing that in the future distribution centres will be closer to city centres and are likely to adopt a vertical format to maximise space rental efficiency. They will also need greater employee parking and service facilities than the standard storage and distribution centres of today offer, which adds up to a major opportunity for warehouse developers today and into the future.

  • Panel 2: The Money Picture
    • Eduard Zehetner, CEO, Immofinanz

      Eduard Zehetner holds a doctorate in economics and has many years of experience in management and management board positions. Among others, he served as CFO of Connect Austria/ONE (1997 to 2000), CEO of Jet2Web Internet Services (2000 to 2001) and CFO of RHI AG (2001 to 2007). Since February 2009, he has been CEO of IMMOFINANZ Group, one of the leading listed real estate companies in Europe. Zehetner is responsible for Asset Management in the Office and Retail Segments as well as Development Commercial, Corporate Communications, Legal and Corporate Finance & Investor Relations. This Austrian turnaround expert was voted CFO of the Year by his CFO colleagues in 2006 and 2010.

    • James Brown, Head of EMEA Research & Consulting, JLL

      James is Head of EMEA Retail Research and Consulting at Jones Lang LaSalle, Working closely with Retail Research and Consulting colleagues across EMEA, James is responsible for co-ordinating and developing all retail research and client consulting needs, providing strategic advice on market or retail real estate, for developers, investors, landlords and retailers.James is a member of the ICSC ERG, the ULI Retail and Entertainment Council, the BCSC and sits on the JLL EMEA Retail Strategy Group.

    • Joseph Ghazal, Managing Director & Head of Capital Deployment for Europe, ProLogis

      Joseph has overall responsibility for all capital deployment spanning Land, Development (including Project Management), Acquisitions, Dispositions and Fund Contributions. He is a member of the European Management Executive Committee and has more than 10 years of experience in logistic real estate development with Prologis.

      Previously Regional Head Northern Europe with overall responsibility for ProLogis’ operations in Scandinavia, Benelux, Germany, Austria and Switzerland, Joseph has also recently held the roles of Senior Vice President Benelux, and also Vice President of the Middle East were his responsibilities included land acquisitions and built-to-suit development and management of state-of-the-art logistics parks to help maximize the efficiency of customers’ supply chain operations, as well as relationship management with key regional and global customers. Before that he was Vice President of Development for ProLogis’ Southern European region, where he operated a development organization that delivers both inventory and built-to-suit projects to logistics companies, retailers, manufacturers and other enterprises with large-scale distribution needs.

      Joseph’s industry experience includes high-level expertise in development, planning, site selection, design and program/construction management. He holds an M.B.A from ESA (Paris ESCP), a Master degree from ESTP (Paris) and a civil engineering degree.

    • Michael Kroeger, Head of International Real Estate Finance, Helaba

    • Mike Rodda, Head of EMEA Cross Border Retail Investment, Cushman & Wakefield

      Michael is Head of EMEA Retail Capital Markets Investment at Cushman & Wakefield, his role involves advising Global clients either selling or acquiring Retail Investments across International Markets.

      Michael has recently been responsible for over €2.5bn of international retail investment transactions. Michael has specialized in Retail Capital Markets within the EMEA team since 2005 having previously headed a European Retail leasing department at Cushman and Wakefield since 2001. Prior to that Michael worked within and headed various Retail teams across EMEA since 1991.

    • Thierry Leleu, Head of Funds Management, VALAD Europe

      Thierry joined Valad in 2013 and has responsibility for the Funds Management operation and is Fund Manager of the Polish Retail Fund. He also assists in the development and launch of new products for equity investors. Thierry was formerly General Manager, Europe, of GE Capital Real Estate’s Global Investment Management division. His previous roles included General Counsel for GE Capital Real Estate Europe and Fund Director of a European private equity real estate fund. He is a graduate from the economic and financial section of the Institut d’Etudes Politiques de Paris (IEP), holds a JD from Paris II Law School and a LL.M from Harvard Law School.

Footfall rents the future?

But the story is more complicated for traditional retail. Unless it can find ways of dovetailing with the growth of online retail in areas like click&collect, where centre revenue lost to ‘show-rooming‘ by retailers on turnover rents could be recouped with innovations stimulating dwell time and foot flow, such as increased leisure and foodcourt components, to support increase in-centre impulse sales platforms such as kiosks.

However, this will require significant up front investment by shopping centre landlords and developers, a long-sighted challenge that asset trading investors may not fit the business model of some. With the result that the product spread of traditional retail centres will likely narrow over time, and some will fail the test and look to reposition and repurpose to survive, said Otis Spencer of Peakside Capital.

  • Moderator
    • Agnieszka Stankiewicz ., Partner, Greenberg Truareg

      Agnieszka is a partner and the head of the real estate team at Norton Rose Fulbright Piotr Strawa and Partners, LP. She is experienced in corporate finance and has extensive knowledge in real estate transactions. Her practice focuses on assisting a variety of foreign and domestic investors in acquisitions, mergers, takeovers, joint ventures, corporate and organizational restructuring, acquisitions and divestments of real estate or real estate holding companies, the financing and refinancing of real estate acquisitions, forward purchase and leaseback transactions, all aspects of real estate development projects as well as the due diligence of companies and assets and the restructuring of their financial indebtedness.

      In addition, Agnieszka assists SC Consulting, an advisory firm, in training the commercial community in the scope of M&A and real estate transactions as well as the due diligence process. She is recommended as a leading individual and key individual in real estate by Chambers and Partners Legal Directory and Legal 500 in 2013

 

 
 

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