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Radosław Krochta
President of the Management Board and CEO
MLP Group

23 March 2021

MLP Group is a leading developer and operator of industrial assets established in 1998, with a dominant presence in Poland and growing across Romania, Germany and Austria. The company currently manages ~1,3 million sqm warehouse space.


You come from investment banking, a different kettle of fish than real estate – what brought you to MLP and what is your vision for the company?

Indeed I started out as an outsider to the industry over a decade ago, and have been with MLP ever since, initially as CFO and then as CEO. Back then we were only present in Poland and Romania, and now we rapidly expanding across Germany and Austria, in fact the latter two I believe should take up about 50% of our business by 2023. One exciting plan we have for this year is the purchase of two plots in Benelux, so as you can see our vision currently leans West, where we see a great deal of opportunity. 

Logistics has been described so many times as the “darling” of real estate during the recent, pandemic ridden period – have you experienced similar growth?

It is true that our area has not been through the kind of hardship as other real estate branches, but I prefer to remain cautiously optimistic instead of claiming that e-commerce and other trends will revolutionize the industry completely and bring it to incredible new heights. No, we have not been suffering, but we are also not experiencing double-digit growth. When I look at our 300 tenants, a third are e-commerce (on the rise), a third light industry (keeping the status quo or experiencing a slight slow down), and one third the logistics segment (also keeping status quo).  2020 was a year of putting many decisions on hold though, so my expectation is that 2022 will be the year seeing most ripple effects, without meaning to be pessimistic. Things also vary widely country by country, Germany for instance started revamping early so that they can maintain exports to China, their net economic growth should reach 1-1.3%. Poland and Romania provide many components for the automotive and other German industries, so they will experience growth with a lag, likely starting in 2022 rather than 2021.

What about Benelux, the latest region you have set your sights on, what makes it appealing and what factors do you normally take into account when expanding into a new market?

We are constantly analyzing opportunities across Europe. Before talking about Benelux, let me tell you about why Romania. In CEE the Czech Republic is a small and relatively saturated market, like many around it, and Bulgaria struggles with corruption. By comparison, Romania with its 22 million inhabitants readily seemed appealing. In addition, many of our tenants were asking us if we have facilities in Romania, and after a successful experience with MLP Bucharest West we are planning on buying another plot and extending our footprint around Bucharest. We believe in investing across core cities only. 


Germany stands out as the biggest logistics market in Europe, and despite its maturity we knew we could compete there, in fact counter-intuitively it is less competitive than Romania or Poland. The market is extremely defragmented, and with space for those who know how to play their cards.


I like to compare the industrial real estate market with the beer market in Poland. We have three breweries that control ~90% of the market, and five industrial developers that control the RE market in Germany. I once spoke to the biggest developer in Cologne who runs around 200,000 sqm, and he said they would stay put, stick to known territory. So we saw that there were no nationwide developers and seized the chance for ourselves, buying projects step by steps across different cities. We then got into Austria last year with the purchase of a property in Vienna in-city, great location for e-commerce. With our eyes open and ear peeled Benelux seems like the next right market to enter. 

How have you seen the profile of your tenants evolve in recent times, and are you considering shifting at all from your long-term investment strategy?

Of our three tenants categories I mentioned, e-commerce, light industry and logistics, the former requires more and more in-city warehousing for better flexibility and agility. The proximity to the city center is absolutely key. Big box remained the same across all three categories. One important thing to mention is that we indeed consciously invest in the long run instead of flipping the assets like some of our competitors, so we are willing to invest in a higher CAPEX. The properties are averaging 6-8% yield, and the market is favorable for holding such assets and borrowing money for any new purchases. Last year we also had an SPO (secondary public offering) and we can easily release more shares if needed for raising capital.  

This strategy relies even more on keeping close watch on the standard of your warehouses – what role do technology and sustainability play in the mix?

Spot on, we prioritize quality. There are two main items of note here: we have photovoltaic panels on the rooftops of our warehouses through our subsidiary MLP Energy, responsible for generating clean energy. A few years ago this may have seemed fashionable, but now are talking about real returns of 10-12% so it makes business sense for us and for our tenants. The second is that we signed a deal with Philips Lighting/ Signify to develop advanced, ecological lighting systems that only use up 10% as much energy as traditional lighting and can be controlled from mobile phones. We estimate that by 2023 we will be carbon neutral, as our PV panels that we started installing this year will be producing more energy than we are in fact using. 

What do you wish to achieve with priority in the coming three years, and what message do you have about the industrial real estate space in Europe?

Our main goal is to grow our presence across Germany and Austria until we reach a 50/50 market share with Poland. The target for Germany is 1 million sqm by 2023, paired with an additional 500,000 sqm in Poland and 100,000 sqm in Romania – we are talking of a total of over 2 million sqm overall.


I sincerely believe logistics is the best real estate sector for anyone to be in, with projected market growth somewhere around 10%. Again, I prefer to be “neutrally optimistic” and not blow things out of proportion, but the business fundamentals are all there.  Near-shoring will also bring manufacturing facilities back to Europe in the coming 5-10 years, and covid-19 only accelerated this trend.

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