Deal 5: 7R Chief Capital Markets Officer Lukasz Jachna on Sale of EUR 101 Million of Park Beskid II

CEEIHM: Let's start with a few words about 7R and its operations in Poland.

Jachna: 7R is a developer of modern and environmentally-friendly warehouse space. The company has been operating on the Polish market for more than 13 years. During these years we have delivered nearly 1.5 million square meters of cutting-edge warehouse and manufacturing space to customers, and we have another 4 million square meters in the investment process. 7R’s facilities are characterized by their high quality of construction, as well as technological and ecological solutions. They are in line with ESG standards, BREEAM-certified, and they generate savings for tenants, such as reduced energy costs due to the design efficiency.

2021 was a record year for us. We doubled the number of completed developments y-o-y, delivering nearly 400,000 square meters of BREEAM-certified space. Furthermore, we divested 17 projects to investment funds and real estate companies for a total of nearly EUR 400 million. One of these projects was 7R Park Beskid II.

This year we are going to start our first international investment, in the Czech Republic.

CEEIHM: What do you believe made 7R Park Beskid II particularly attractive as a target?

Jachna: 7R Park Beskid II is one of 7R’s latest projects and is a continuation of the company's strategy of warehouse infrastructure development in the Silesian region. This logistics complex with an area of approximately 90,000 square meters, consists of five buildings, offers warehouse and production spaces. The investment, thanks to the ecological solutions, which additionally increase the energy efficiency of the building, is covered by BREEAM certification.

There is a full set of mixed tenants, such as Martes Sport, Prosperplast, Cooper Standard, and Valeo Siemens eAutomotive (facility prepared in a Build-to-Suit formula). What is interesting, Valeo, which is a leading supplier of motors and other technologies for electric and hybrid vehicles, has opened a motor production there.

7R Park Beskid II is also attractive as an investment asset because of its location. The Upper Silesia region in Poland, which together with the neighboring Bielsko-Biała, has established itself as one of the largest clusters of production and distribution facilities for the automotive industry in Europe. The region is a well-established cross-border hub, near the border with the Czech Republic and Slovakia. The asset itself is strategically located, directly adjacent to national road 1, which connects the property to the A4 highway - the most important transportation corridor in Southern Poland.

CEEIHM: What would you point to as the biggest challenge in concluding this deal and how was it overcome?

Jachna: It was a very complex project; some of the buildings were sold as standing assets, some still under construction. At the same time, the project consisted of two different project types: big box and BTS. It required much commercial and legal effort to make it ready for highly institutional, overseas investors. The timing was the biggest challenge, but it was possible thanks to the multilayer work.

CEEIHM: How did you split the legal work between your in-house team and your external counsel?

Jachna: The external counsel was our “face” to the buy-side, coordinating all specific requirements and leading the core documents. The in-house team provided all the necessary data and pointed out practical solutions for specific open points. The win-win strategy was to align both parties and work in a matrix info flow.

CEEIHM: And why did you pick Baker McKenzie as your advisor on this deal?

Jachna: The Baker McKenzie real estate team is very experienced; simultaneously, they knew the project early, which was critical to making it efficient.