Deep roots & value which only history can provide
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Capital Park’s unique Norblin Factory mixed-use scheme in the heart of Warsaw not only has a deep physical foundation, it also has profound historical ties to the local community and the wider city.
Norblin Factory, Capital Park’s mixed-use modern-historical scheme in the heart of the post-industrial Wola district of Warsaw, is now very clearly at the above-ground stage of development. Unlike most projects, the below-ground part is almost as deep in scale as what you see with the naked eye. “At some point people were asking us: ‘Are you building?” says Kinga Nowakowska, Board Member and Operations Director for Capital Park. “The scheme goes 35m down, while the buildings rise to 40m. This is a very specific project – complex and enormous. It hasn’t been easy to talk to the heritage preservation people, but one of the biggest lessons I’ve learnt on this project is how valuable the job they do is.”
Norblin Factory – which will have a total of 65,000 sqm of commercial space on its opening in H2 2021, of which 41,000 sqm is office and the remaining 24,000 sqm a compilation of several functions: restaurants, entertainment, culture, retail, services and wellness – is one of Warsaw’s longest-running projects, the company having bought the site back in 2008. “When we first started planning the project it was a very different market. We assumed the retail part would be the driver. In fact it has been the office part that has led. It’s a completely different project than the one we started out on” she says.
According to Nowakowska, leasing the office space has been “relatively easy”, despite the fact that rental prices are higher than office space in surrounding schemes, and now Norblin’s office part is almost full. “The office sector is booming – we have quite frankly been surprised at the level of interest. When we launched the project people were more interested in the price. Now the quality is much more important than it used to be – tenants are looking for something different, and that includes a work-life balance. And it’s an employee market. Companies see a project like Norblin as a way to attract the best employees.”
A recently-announced tenant is JTI Polska, a member of the Japan Tobacco International group, which is taking 8500 sqm to house its Global Business Service Center to support JTI’s operations worldwide. JTI’s new office will be located on three levels of the building – including access to a roof terrace – and house 850 employees. Recruitment is already underway, says Paulo Lopez, JTI GBS Warsaw Delivery Center General Manager.
Norblin Factory stands out, says Nowakowska, and the scheme’s very name gives a hint as to its nature. “The project will be an open museum,” she says, “where plated-steel platters and ornaments from the original factory will be on display – in this way our scheme will also be interesting for tourists as well.” A special foundation has been set up to take care of the ‘open museum’ part of the scheme: The Norblin Factory Foundation (Fundacja Fabryki Norblina).
Creative management with a graduation tower
Capital Park, says Nowakowska, practices “creative asset management,” something which the company’s track record with projects such as Royal Wilanów and Eurocentrum bears out. “Our tenants at Royal Wilanów have access to a doctor based in the building, and at both Eurocentrum and Royal Wilanów there’s an ambulance in the building. We have around three critical interventions a month and around 30 non-critical interventions. It actually saves lives – if you call a regular ambulance you can wait an hour. And it’s not part of the service charge. The office doctor has proved to be an extremely helpful service during the coronavirus pandemic. The medical services dedicated to our building have their hands full and office workers appreciate the presence of rescuers on site, the opportunity to perform tests and access to professional advice on sanitary and hygienic protection.” This creative management extends to more artistic pursuits as well – with a democratic flavour in the mix. For the last two years, Capital Park has asked its tenants, within a ‘participatory budget’ programme, to put forward ideas for services they would like to see in the scheme, and then vote on them. In 2019 the winners were a PET bottles machine and – uniquely – a ‘graduation’ tower inside the building. This is not a tower on which you stand when you graduate, it’s a structure that causes the evaporation of saline water which improves the surrounding air quality. You won’t find many of those in modern office buildings around the world, and it brings to life the term ‘creative management’ – with a unique Polish touch.
Buying in to the company – and Poland
It is this ‘stand-out-from-the-crowd’ approach which helped attract pan-European real estate investment company Europi Property Group AB to buy a 12.3% stake in Capital Park back in March of this year, joining “like-minded” investor Madison International Realty. “Capital Park’s excellent track record, fully integrated developer-owner-operator platform and phenomenal management team stood out to us when benchmarking Polish real estate companies against each other,” says EPG CEO Jonathan Willén. But the company’s interest in the Polish real estate market ultimately comes from a fundamental appreciation of Poland’s economic situation, even in the current crisis. “EPG’s interest in Poland stems from its favourable macroeconomic and demographic trends, as well as the relative value compared to other European countries and highly institutional & well-functioning capital markets. Warsaw, as well as Gdańsk, Wrocław and Kraków, are compelling investment markets in our view, and Capital Park’s best-in-class platform is well-positioned to capitalise on opportunities in these markets.” For Willén, formerly a Principal in Blackstone’s European Real Estate team, and EPG’s co-founding affiliate group Brunswick Real Estate, a leading Nordic real estate investor and fund manager, Norblin Factory stands out. “Norblin, in our view, is one of the best kinds of examples of urban regeneration and community placemaking. This former factory, with its cultural heritage, is now getting repositioned into a thriving mixed-use estate that will create a real community in this well-located part of the city. Capital Park’s approach to redevelopment takes all stakeholders’ interests to heart and creates a first-class real estate asset that will benefit the city and spur further growth. From a capital markets perspective, Norblin will be a class A institutional asset once delivered mid-2021.” Concerning the COVID19 crisis, Willén believes that Poland is better-positioned than most other countries to weather the storm: “While it’s still early to tell which markets are going to be most affected, and to what extent in the medium term, we feel that Poland is well-positioned from a relative European perspective with, one, a lot of domestically-led growth, and two, an early response to the crises by the government. In the medium-long term we believe Poland will continue to outperform Europe on average, and most of its peers.”
Is Norblin Factory on the market? “When the time comes – we would like to deliver the project first,” states Nowakowska. “We have great ideas and we have great tenants, but the key will be how we involve those tenants and merge them together to create a destination. We’d like to manage the building for at least a couple of years after it’s completed. When we bought Norblin we knew it would be downtown – but now it’s the downtown of downtown. There’s a catchment of around 150,000 people within a 5-minute walk. Warsaw Spire did a lot to establish this part of Wola as a thriving business community, Skanska did as well. We’re really excited to continue this new legacy. We don’t think about properties as real estate projects, but as public spaces and vibrant parts of town. There are only a few plots in Warsaw where it’s possible to keep history alive and – as a native of Warsaw – the history of the city is very important to me, as it is to all our team. Norblin is one of only a few such places in the city. We build the project – but there’s a value which only history can provide.”