GLP Europe Logistics Centurm in Lędziny is a huge project with over 110,000 m2 of warehouse and production space.
As Trebbi Polska, we are pleased to support our client and participate in the process of supervising the progress of work with Project Management activities carried out by Bartłomiej Lach.
The planned completion of the first stage of the investment is scheduled for the second half of 2021, and we are already sharing the visualization of this project with you. We can not wait to see the result, what about you?
Reading an article that was written by my friend from Trebbi Polska Adam Topolski published on our LinkedIn on 6th of April 2021 (link) reminded me of one question which has been asked by the Investors to me quite often lately: “Testing soil contamination, which soil group should be selected, in accordance to the Ordinance of the Minister of the Environment dated 1st September 2016 on the contaminated land assessment methodology and in accordance to Master Plan, in force at that location?” Without a doubt, the most demanding.
But, slowing down, what we are talking about? When you are planning to buy a plot and invest a lot of money, it is always worth not to buy a pig in a poke (in polish, we say not to buy a cat in the bag). It has to be checked, inter alia, whether the soil contamination within the investment boundaries is at the permissible level. Under adverse conditions, the cost of remediation can be a relevant budget item. Basing on the soil group, a further method of operation and permissible soil contamination values are selected. But what if we have current use different than planned? Or Master plan predicts the same location use attributed to two different groups? What then? Are we available to choose the most efficient one for us, or we have to operate under the most demanding rules? As usual, for reasons of cost, as long as the regulations do not require it, Investors do not want to incur it, even if we have to fit into the most restrictive requirements. In this matter, the authorities are very precise. According to the Regulation of the Minister of the Environment mentioned above Master plan takes precedence over the symbols in the land register when determining the land groups (paragraph 3.4).
In the case of several possible site zoning designations (e.g. P / U, PUG), the Ministry of Environment guidelines (the information presented in the official presentation of the Ministry of Environment, page No. 19 in Polish only, link) require the application of the most restrictive requirements for the soil chemical quality. Thus, regardless of future development, the soil quality requirements for the most demanding standards will be applicable. In such a case in the P/U area, the investments including warehouse or production building would have to meet the most demanding requirements (set for services). Even though the guidelines have not been published as a separate legal act, the authorities are already following.
However, the investors still have options to optimise the investment costs in terms of contaminated land liability. Polish legislation provides a risk assessment approach, but this is a whole different story and maybe the next article.
The current legal approach to the contaminated land liability and the presentation was indicated, during one of our cooperations, by Michal Golos, the Environmental Consultant at RSK Polska.
In 2021 the Industrial market grows despite the pandemic waves challenging global economics. More and more we hear about the big-box investments being launched throughout the country, transforming, and modernizing the agricultural areas and local communities.
As the space requirements are higher and higher, new land opportunities have to be identified to cope with the demand. Being able to participate in these investments at different stages of development, I would like to shed some light on the most common questions relating to the planning costs correlated with this type of development.
PLANING RELATED COSTS
Adjacent fee
Looking for significant land areas, above 30-40 ha, it is very common to identify these outside the cities perimeter, in agricultural regions. Most often being owned by multiple tenures, with no infrastructure on site. Planning the Investment budget, the Investor should be aware of the potential fee, which can be charged by the commune office or the city office by up to 30% of the land value increase related to the land division/merge or the infrastructure modernization covered by the public funds (state treasury/European funds).
The percentage of the adjacent fee, as it is called, is always regulated by the separate city commune/city council resolution. The fee is based on an administrative decision which can be issued up to 3 years after completion of the land division/merge or the infrastructure development. There are exclusions to this fee, which should be always analyzed and consulted with the legal team.
The adjacent fee is regulated by the Ministry Property Management act.
Planning fee
There are situations when the property is covered by the masterplan. On various locations, the masterplan wording is not ideal for the development, forcing the Investor to apply for changing of this act. Should the masterplan amendment increase the property value, a one-off payment might be charged against the owner, subject to the property sale. The same planning fee applies to the new masterplans (if such uplifts the real estate market value).
The Planning fee can vary from 0 to 30% of the property value increase and can be charged if the property is being sold within 5 years of the new/amended masterplan validation.
The exact percentage of this fee has to be identified by the abovementioned masterplan. The planning fee is regulated by the government planning and land development act.
PERMITTING & CONSTRUCTION RELATED COSTS
Agricultural production exclusion
Most of the time, when it comes to greenfield transactions, these lands are being used for agricultural production. Even if the masterplan identifies a different use, it still does not mean we can start the construction process or obtain a building permit. To start the development process, the land should be excluded from agricultural production. The procedure is finalized with an administrative decision, most often obliging the Investor to the one-off payment and/or 10-year annual installments.
The one-off payment is calculated based on the soil class, land area, and market value. The result comes from multiplying the excluded area by the adequate soil class-related calculation cost. The one-off payment is not applicable if the above calculation result is equal to or lower than the current market land value.
The 10-year annual installment results from the excluded land area multiplied by the adequate soil class-related calculation cost. The result is divided into 10 annual installments.
The whole procedure, and the adequate soil types calculation costs are regulated by the government agricultural land protection act.
The procedure itself consists of two separate decisions. One of them, the first one is informative and identifies the costs related. The second part is granted based on the factual land-use change and informs the Investor about the sanctioned payment obligation and the payment deadlines.
In case of agricultural areas not covered by the masterplan, it is always worth checking, whether the property can be excluded from the agricultural production. On various occasions, depending on the soil class, such a cost is not applicable, therefore it is always worth performing legal and technical due diligence to assess all the abovementioned costs related to the purchase before it is being finalized.
It’s worth changing a perspective from time to time!
As you can see, the top view is quite impressive and allows you to see the scale of the key investment for LPP S.A. better, during which we have full control over the construction process.
This is just the beginning, and we are already looking forward to the result and more drone flights.
How Time passes. I don’t know if you ever wonder about the passage of time? How fast it goes, especially if you are satisfied with what is happening as it passes.
As I remember today, middle of the day, Warsaw, city center, notarial deed and signing the company agreement. March 20, 2014. Seven years ago – who would have thought? The notary, our lawyer, and the three of us – Chris, Arek, and me. What happened then – you may have already guessed, Trebbi Polska is being established. A unique creation of our desires – our own company! Impossible and yet true – we create something out of nothing. At that time, we did not wonder if we would have enough to live on, it is important to get out of the closed system we were stuck in and start breathing. And create a company.
I remember that the day was not too cold, warmer than it is now, the breeze of spring was blowing our jackets – after all, for a notarial deed it was necessary to look elegant and wear suits. Our British partner – Chris Lowe – constantly commented on the beauty of Warsaw in spring and put us in a good mood. Me and Arek – attentive, maybe a little stressed – who will be the first to order our services, who will want to believe us and cooperate with us? A notarial deed is just a deed – a document, but no work, no commissions, no ups, and downs, it’s just a blank document.
A lot has changed since then, we are already seven years old as Trebbi Polska. Someone will ask – why exactly this memory with such an unequal anniversary? The number seven is a number considered mystical, distinguished by rich symbolism. In many mythologies and religions of the world, it is a symbol of wholeness, complement, it symbolizes the relationship of time and space. Hence the idea to show off, present and mention right now. Because something has happened. A dream of your own business, a thriving company, a company that is becoming more and more recognizable. About the fact that now I am not worried about whether there will be orders … but about the fact that I have to think whether we will be able to serve investors, clients, or do we have enough staff to take on new challenges? A headache, but how different, how cool and interesting.
7 years ago, I did not know if we would survive the first year, or if we would not be looking for a job in a year for ourselves. I remember my late father, a construction engineer made of flesh and blood, who was always repeating to me from the moment I surprised him and, however, directed my steps to the Warsaw University of Technology and the Faculty of Civil Engineering. “You are always an engineer … but only sometimes happen you are a director.” Years later, Dad, I can say that just as you were right, you were wrong too. Our seven years show that not only “happens” – how often it is in fact.
Looking throughout these 7 years of work on the real estate market in Poland, I remember different moments. I remember when you had to borrow money for employees’ wages to the company to survive the lack of payments from several of our big clients – you would say that late payments are normal, but for a start-up like ours then it was to be or not to be. But then consistency and stubbornness gave us the strength to survive. At that time, we worked for several large players on the Polish market and we were not significant to them, yet we completed the projects, we got money for our services and we were able to develop further.
We started with 5 people – Chris far away in the UK, Arek in Poznań and Warsaw, and me here. Also, our assistant Magda and our first engineer – Grzegorz. Instant office in Chłodna Street, a single room for rent and great hopes. We started with two specific things – claims for a large General Contractor and a large office tower in the center of Warsaw designed for a large real estate fund. Then, looking at the sequence, the next milestone was the representation of the tenant, a large law firm, where we helped them go through a very difficult process of changing the office – not only in the technical sphere but also in terms of image and business. Thanks to this, we showed what we can do, what our work ethos is, and what is important to us in business. During this tenant representation, people on the other side of the table – Landlord, one of the largest in the real estate market in Poland – appreciated us as opponents, and, leaving the negotiating table, we immediately got a proposal for cooperation. That’s how I understand it – no matter how or where, if you are a professional it will show and people will appreciate it.
Then there was a moment when it was necessary to bring the main shopping center in the capital of Greater Poland into order and composition during the end of construction, to run it for the last six months before its opening, and to positive takeovers with the Authorities. We did it at the request of a large General Contractor, internally harmonizing the Polish and foreign side of this company, leading and coordinating quite conflicted engineers around. In this regard, Arek showed once again how we work and what we are capable of. The center opened, everyone was satisfied and we were once again satisfied with the good engineering work.
However, it was not always beautiful, we have one project on which I admit that we did not do everything we could in the short time we had at our disposal. Lower Silesia, how beautiful, is also associated with the corporate theme of certain office space, next to a large shopping center, where, unfortunately, not everything turned out as we would like. Very difficult relations with the international Tenant, a difficult and nervous Client – the Landlord, two General Contractors who we had to remove from the Project … Unfortunately, although in combat conditions, after a few optimizations, we finally managed to come up with a recovery plan that guaranteed the end of the fit-out – we had to for “political” reasons to leave this ship. Well, as the English say – lesson learned. It is important that we came out of this Project strengthened, determined, and, contrary to the first view, stronger.
Then there were some important projects, bigger and smaller. We have been working on our professional image all the time, repeatedly doing technical audits, audits of plots, shopping centers, large stores, office spaces for the largest developers. In seven years, looking at the project registry, we have over 150 of them right now. And it keeps coming.
It wasn’t easy at first in a pandemic – a year ago we were in completely different moods. Investments stopped, our clients started to withdraw from projects. It was bad at the beginning. But what for is the flexibility of operation – if the retail or office sector does not work, let’s start supporting logistics more strongly. At the beginning of the pandemic, we helped with the take over of one of the largest warehouse developers. And from then on, thanks to the quality of work and commitment shown again, we got new orders. The fear of the first months of the pandemic affected everyone. And yet we didn’t fire anyone out – on the contrary, we hired people! Additionally, I can write with a clear conscience that I am proud of the fact that we did not lower the salary of anyone using the pandemic! This shows our strength.
By the way – the first engineer at the beginning of the article (I don’t know if you remember him?) – is now our partner. With hard work and commitment, Grzegorz bought out his share of Trebbi Polska. Isn’t that amazing? Consistency and stubbornness in pursuing the goal give a lot. Our philosophy is to share. The knowledge, experience, joint successes, but also, as can be seen from Grzegorz’s example, a company.
As I write these words, I remind myself of those seven years. What a period. I can not stand the tension, what another seven years will bring. I already know that we will surprise honorable audience in a moment with a very serious topic, which we won this year in a public tender. Despite many protests from our respectable competition. But quiet about it, let us sign the contract. And then it will be loud.
And so….
On the occasion of 7 years of Trebbi Polska’s existence, I wish my partners, all employees, and their families, all acquaintances and friends, all with whom we worked and who wish us well, fruitful and wonderful next seven years. Despite the pandemic, politicians, wars, and other factors.
ALL THE BEST TREBBI POLSKA FOR ITS SEVENTH ANNIVERSARY!
We are pleased to announce that our group of shareholders – Christopher Lowe, Arkadiusz Osiński, Mariusz Witkun is enlarged by Grzegorz Piórczyński, who has supported us from the very beginning and works as Senior Project Manager.
Grzegorz Piórczyński is a graduate of the Civil Engineering Faculty of the Warsaw University of Technology and postgraduate studies in Project Management in Construction at the same Faculty. Member of The Polish Association of Construction Managers and the Mazovian District Chamber of Civil Engineers. His work is a passion combined with years of experience and vast knowledge!
Ad meliora tempora! What will 2021 be like for the real estate industry and the construction market? What significant trends will we observe?
In the latest article Mariusz Witkun summarizes the operations of Trebbi Polska in 2020, presents the condition of the industry during the crisis and looks to the future with optimism, predicting the biggest trends for 2021. Enjoy your reading!
It is obvious for everyone, that there should be any schedule, timeline or at least a plan for multi-million construction investment. Is it not? Based on his professional experience, Adam Topolski tells about how to:
☑️ efficiently optimise a time schedule for a process,
☑️ match it to the relevant entities,
☑️ and about one common and basic rule that we cannot forget.
