Pomeranian Metropolitan Railway -Tri

Pomeranian Metropolitan Railway

Tri-City’s real estate market on the new track

Co-authors:

Pomeranian Metropolitan Railway 01 January 2015

Dear Sirs and Madams, Pomeranian In September passenger trains will start operating on the newly built (the first in Poland after 1989) 18 km-long Kolej Kokoszkowska railway line. It will link Metropolitan Railway Gdańsk Wrzeszcz station with Lech Wałęsa international airport and Gdynia with the southern and western regions of the Pomeranian voivodeship. (PKM)

Pomorska Kolej Metropolitalna S.A. – a company acting on behalf of the Pomeranian voivodeship – is the investor responsible for delivering this infrastructure. New trains have been ordered to operate on the new line. The total cost of the investment is in excess of PLN 1 billion and is the largest 10 investment being made by the Pomeranian voivodeship. Number of trains Rail transport is of key importance in the wider Tri-City metropolitan area. Together with the modernisation projects of Szybka Kolej Miejska (SKM), which transports more than 34 million passengers annually, this mean of transport is gaining in importance even more.

New infrastructure will be a significant growth-driver not only for Gdańsk and 15 min Lech Wałęsa international airport (which is planning a new Airport City Frequency during project), but also for the southern and western parts of the Pomeranian rush hours voivodeship. The regional authorities intend to fully integrate the new line with the existing road and rail infrastructure of the cities it will go through. Gdańsk may serve as an example of such an approach, where tram infrastructure is being integrated with the Pomeranian Metropolitan Railway (PKM). This year a new section of tram line connected in such way will be completed. 6,5 mln Estimated annual I am convinced that Pomeranian Metropolitan Railway will greatly influence number of passangers the socio-economic development of our region over the next few years, much as the SKM did. Already today, the positive impact of the new railway is clearly visible. In the close vicinity of the PKM, new investments, such as residential projects, are starting to develop. One of the main reasons for this is the proximity of passenger transport, which is crucial for that kind of development. 18 km We are pleased to present a publication that examines the impact of the Length of the new line Pomeranian Metropolitan Railway on the real estate market of Tri-City and its wider metropolitan area.

11 Number

of new stations

Ryszard Świlski Member of the Board of Pomeranian Voivodship 130m 130 m Topographic drop

Pomorska Kolej Metropolitalna 01 January 2015

Economy and Infrastructure The Tri-City’s accessibility from Poland’s hinterland has improved greatly as a result of the completion of the A1 motorway to Stryków and, more recently, Crucial sectors of Pomeranian economy as a result of the new Pendolino trains, which have been operating since 14 In 2010, PwC and IBnGR published research titled ‘An investment December 2014. The journey from Warsaw to the Tri-City takes attractiveness analysis of the Pomeranian voivodeship’. It showed the six approximately three hours and it is being operated by five trains which have a main sectors of the economy that have the greatest potential to develop in maximum speed of 200km/h. the region: logistics, BPO/SSC (Business Process Outsourcing / Shared Service Centre), ICT (Information and Communication Technologies), the The tunnel under the Martwa Wisła river will facilitate transportation around energy sector, light chemicals industry, and the automotive sector. Gdańsk city centre and improve the accessibility of the Wyspa Portowa island. It will not disturb the only waterway between the Motława river, Labour market Martwa Wisła and the open sea. The tunnel will also reduce transit traffic in Approximately 60% of the working population of the Pomeranian voivodeship Gdańsk city centre. is based in the wider Tri-City metropolitan area. This situation encourages labour market specialisation, which leads to better resource allocation. The The Tri-City northern ring road. The northern by-pass is designed to unemployment rate in the region is well-below the averages of the rest of the redirect transit traffic from the centres of Reda, Rumia and Gdynia and to voivodeship’s subregions. generate attractive investment areas along the regional transportation corridors. The project will also improve the accessibility of the north-western Employed* 875,000 part of the Pomeranian voivodeship from the Tri-City and the rest of the country, which is one of the priorities of the Development Strategy of the Unemployed* 84,000 Pomeranian voivodeship. Working age popolation* 1,454,944 SKM station Gdańsk Śródmieście is a project that started in August 2013. Unemployment rate** 8.8% (9.1% Poland’s average) The SKM rail line will be extended by 1 km and a new station, Gdańsk Source: Central Statistical Office Q2 2014, *Data for Pomeranian voivodeship, Śródmieście, will be added to the existing network. The station will be located **Economic Activity data next to the Urząd Marszałkowski office and the planned Forum Radunia shopping centre. The project also involves the construction of a new Dynamic changes of the labour market in the region have resulted in a integrated transportation hub. SKM Śródmieście is due to be completed in significant increase in salary levels. The average monthly gross salary in the March 2015. enterprise sector in the voivodeship is PLN 4,088 (as at H1 2014). Other investment projects Infrastructure The Tri-City is an important historical and cultural location and therefore Attracting new investments from the desired sectors requires new transport invests in a range of projects in addition to infrastructural improvements. and technical infrastructure. Often, existing infrastructure is vastly outdated Those projects refer to local history and genius loci and thus enrich the Tri- and needs significant improvements. The Tri-City is currently one of the City’s tourist and cultural attractiveness. largest construction sites in Poland. In addition to the ongoing Pomeranian Metropolitan Railway project, the key investment projects in the region include: The European Solidarity Centre in Gdańsk opened in August 2014. It was co-funded by the European Regional Development Fund within the Infrastructure and Environment Programme. The ESC, located next to Gdańsk and Gdynia ports development. Gdańsk shipyard, has, due to its extraordinary design, become an important The state-of-the-art Deepwater Container Terminal Gdańsk provides historical and architectural symbol of the city. Moreover it is an interesting Pomerania with a direct connection with Asia through the Maersk Line point on the landscape of the Tri-City area. service point. It is worth mentioning that the new terminal is able to handle the largest container ships with a capacity exceeding 18,000 TEU (twenty- foot equivalent unit). In March 2013, Port of Gdańsk authorities and DCT The Museum of the Second World War in Gdańsk. The idea for this signed an agreement to further extend the DCT capacity to 4 million TEU. museum came to life in 2008. The mission of the museum is for it to become an important institution that will show the wartime experiences of both Poland In order to maintain its competitive edge, Gdynia port decided to improve its and other European countries. The museum will be located next to Główne capacity and transport infrastructure. In January 2014, Port of Gdynia Miasto and the Radunia channel. Its completion is planned for 2016. Authority SA. acquired the Gościnne quay from Naval Shipyard Gdynia Poland, which will allow the port to build a new 480 m-diameter turn-table. The Emigration Museum will be located in the building of Dworzec Morski in The next stage of the Gdynia port refurbishment is deepening the port the Port of Gdynia. It will focus on the history of the emigration from Poland channel by 2 m from 13.5 m to 15.5 m. All these planned improvements will and will combine exhibitional, educational and artistic functions. It is planned allow Gdynia port to handle 380 m-long container ships of up to 14,000 TEU for completion in May/June 2015. capacity.

Pomeranian Metropolitan Railway 01 January 2015

of the increased inflows of passengers. As a result of passenger transfers Real Estate Market from the PKM to the SKM in Wrzeszcz, properties located along the existing SKM line will also benefit indirectly from the new infrastructure.

The Pomeranian Metropolitan Railway (pol. Pomorska Kolej Metropolitalna – Another area with growth potential is Strzyża station. The station is located PKM) will not only improve the quality of public transport in the Tri-City area, close to the university campus and a dynamically expanding modern office but will also influence the geography of the real estate market there. Similar hub. The accessibility of the area will be significantly improved by the transport projects in other cities, in particular those involving rail, have been a convenient transfer to the existing tram line, which looks set to reduce travel stimulus that inspired changes of both local and regional scale. time to real estate assets located in a vicinity of the Strzyża station.

The PKM will open new areas of the agglomeration for investments, integrate From the commercial and residential property perspective, Niedźwiednik various means of transport and operate as commuter transportation for the station, situated next to the de la Salle roundabout, will be less impactful. residents of the wider agglomeration. As a result of improved accessibility, However, this situation may change after the new master plan, which is areas adjacent to the new stations will gain the potential necessary for them currently being drawn up, is in place. to become attractive new locations for commercial and residential projects. The rapid rail connection from Gdańsk and Gdynia to Żukowo, Kartuzy and The new PKM line will clearly improve the accessibility of Wrzeszcz and Kościerzyna will reduce travel time to Tri-City for the residents of the Oliwa for the residents of the Tri-City’s upper terrace. However, impact of the Kaszuby region (almost 200,000 people live in the Kartuzy and Kościerzyna PKM on the locations in the lower terrace will be fairly limited. This is due to poviats). Consequently, the mobility of potential employees for the Tri-City’s the fact that this area has already experienced extensive office and retail offices will be enhanced. It is worth mentioning that the Tri-City office market development. Although the PKM will not serve as an initial development development is driven by the BPO/SSC sector. Most employees from that stimulus, it will considerably improve the perception and prestige of the area. sector are from younger age groups, who also happen to be the most frequent users of public transport. The PKM will also provide a new influx of Section II potential customers for shopping centres located in Wrzeszcz, Gdynia and the area of the Tri-City ring road. In addition, the new rail line will boost the Brętowo and Kiełpinek stations are located in difficult terrain featuring investment attractiveness of the municipalities located along rail line No. 201, significant height differences, which makes this section of the PKM almost a especially in terms of the residential market. mountain railway. Steep moraine hills have been a natural development barrier for the city and the area features one of the lowest population The following part of the publication looks into the growth potential of all the densities in the entire agglomeration. However, the area between the Tri- real estate market sectors after passenger traffic has started on the currently City’s ring road and the lower terrace is becoming an attractive location for modernised Kokoszkowska line and line No. 201 from Gdynia to residential development, which is, to a large extent, triggered by the Rębiechowo. For the purposes of this analysis and taking into consideration construction of the PKM. diversity of the areas the PKM will go through, the line has been divided into four separate sections, each of which share similar functions and real estate The Jasień and Kiełpinek stations in particular will be major incentives for market potential: residential developments in these previously inaccessible areas. It is envisaged that the area located south of the PKM line, from the Wiszące  Section I: Gdańsk Wrzeszcz station – Niedźwiednik station Ogrody residential area towards Wróbla Staw Pond and Myśliwska street will be covered with residential developments similar to those already under  Section II: Brętowo station – Kiełpinek station construction (small buildings of four to five storeys). Another possible direction of development is to the north of the PKM line, next to Kiełpinek  Section III: Matarnia station – rail line no 201 station. Also, areas now occupied by numerous allotments surrounding the Jasień area might be converted into residential areas in the future.  Section IV: Rębiechowo - Gdynia Stadion station (along rail line no 201) Brętowo station and its impact on the surrounding area has to be Section I considered from the perspective of multiple transportation changes around the Piecki-Migowo residential complex. In addition to the PKM, a new tram Areas of Wrzeszcz and Oliwa are currently one of the gravity points of the line will be connected with the PKM and new investments changing the road entire agglomeration. This is where the largest office hub and popular network are planned for the area. All those improvements will influence the shopping centres are concentrated (e.g. Galeria Bałtycka, Manhattan or attractiveness of the location, where new residential areas are expected to Galeria Metropolia currently under construction). emerge among existing developments. Another consequence will be increased density of detached housing area of Matemblewo with both new After the PKM becomes operational, Gdańsk Wrzeszcz station will gain the detached houses and small multi-family houses. largest significance as a commuter hub where the trains (at least in the initial phase) will terminate. In Gdańsk Wrzeszcz passengers will transfer from the In respect of commercial development, this section’s potential is fairly limited. PKM to the SKM and other means of public transport. The office buildings Reasons underlying this situation include the difficult terrain, sparse road and shopping centres in the station’s vicinity will be the obvious beneficiaries infrastructure and limited number of residents in the area. However, the

Pomeranian Metropolitan Railway 01 January 2015

Auchan Gdańsk shopping centre will definitely benefit from the new station. Science and Technology Park Gdynia, Tensor business park (currently under The centre is located right next to the Kiełpinek PKM station and the construction), retail centres (Centrum Riviera shopping centre), as well as Park&Ride parking lot, which will also be used by drivers travelling along the sports facilities (Stadion Miejski, MOSiR, Arena Gdynia, the National Rugby Tricity’s ring road. Stadium).

Section III After the completion of Gdańsk Osowa station, the residential market looks set to continue it’s growth in this district, in particular the area between The areas located to the west of the Tri-City ring road will be, in our opinion, Koziorożca street and the rail line, which is where residential developments the greatest beneficiaries of the PKM. One of the key priorities of the project are planned. Also, areas west of lake Jezioro Wysokie will become more was to ensure a convenient link between Lech Wałęsa international airport attractive for investors. It is believed that after the launch of the PKM, the and Wrzeszcz. Thus all the areas surrounding the airport will become former prestige and attractiveness of Osowa may be restored. attractive locations for investments. Karwiny station will improve connections to Gdynia city centre, the airport Indeed, PKM development will further improve the potential of the areas and Wrzeszcz for the residents of the Wielki Kack district. This location is surrounding Lech Wałęsa international airport in terms of the office real already an attractive area for residential developments and its potential will estate market. One major planned project in the area is Airport City, which be even greater after the completion of the PKM. will focus on developing business infrastructure around the airport. Due to its impressive scale, the project has been divided into phases. The PKM will Finally, it is worth mentioning that due to the refurbishment of rail line No. 201 greatly improve working standards for the companies already operating in the Gdynia will gain a direct and fast connection with the airport in Rębiechowo. area, such as one of the largest IT employers in the city, Intel, which It will be an attractive alternative for other means of transport on that route. continues to expand. The PKM will also be a great added value for office buildings located right next to the airport, such as BCB Business Park and SKAT: they will become more attractive for the potential tenants thanks to their improved accessibility. There is also great potential for industrial investments along the Tri-City ring Conclusions road. Currently, the largest amount of industrial buildings in the Tri-City is located much further south than the PKM. However, there are vast plots of investment land located in the area that are well-suited to that kind of activity. Pomorska Kolej Metropolitalna will integrate all the other Therefore, new PKM stations may be one of the key factors for production means of transport in the Tri-City, in particular rail transport. companies searching for investment land. Good accessibility for potential Wrzeszcz station will gain in importance, becoming a main employees is an important factor when choosing location for logistics centres transfer point in the Tri-City agglomeration. New inflows of too. passengers will use existing means of transport, such as the SKM, which will lead to increased accessibility to properties along From the residential market perspective, in this section of the rail line the the SKM line. impact of the PKM will be more long-term. The inflow of new employees to office and industrial properties will be a stimulus for developing detached New stations will generate new locations for real estate houses in the areas of Matarnia and Kokoszki. In the longer term, new investments. The Matarnia, Kiełpinek, Jasień and Brętowo residential complexes will start developing, especially in the immediate stations will create areas for residential and commercial vicinity of already existing housing. investments, while the Wrzeszcz, Strzyża, Kiełpinek, Port Lotniczy, Rębiechowo and Gdynia Stadion stations will further Section IV improve the importance of already existing commercial hubs.

Simultaneously to the modernisation of Kolej Kokoszkowska line, rail line no. The PKM will increase the impact of the Tri-City in the south- 201, which links Gdynia Główna with Kartuzy and further on to Kościerzyna, western part of the agglomeration and Kartuzy and Kościerzyna is being modernised so as to handle commuter traffic. Ultimately, transport poviats. It will be a stimulus for development of the real estate links within the agglomeration should allow connections from Gdynia and markets in those areas and will increase inflow of potential through Gdańsk airport to Wrzeszcz, thus ensuring convenient access to the employees from the fringe of the agglomeration to its core. Tri-City for residents of Kaszuby. The PKM will be one of the factors that will reduce automobile Regardless of the final arrangements concerning traffic organisation in this traffic in the Tri-City by offering a sound alternative on the east– section, a few areas are likely to grow on the back of PKM. west axis. The new fast and reliable means of transport should convince a significant number of people to choose public transport From the commercial real estate point of view, areas surrounding Gdynia over cars. Stadion station will definitely benefit from the PKM. This location is already developed with office projects, such as Łużycka Office Park, Pomeranian

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Magdalena Reńska Jan Jakub Zombirt Katarzyna Kuniewicz Magdalena Piechota-Sieczkowska Associate Director Senior Research Analyst Director Specialist Head of Office, Gdańsk Research & Consultancy Zespół Badań i Analiz Rynku ul. Arkońska 61 ul. Kaprów 19/28 ul. Królewska 16 ul. Belwederska 9/103 80-387 Gdańsk 80-316 Gdańsk 00-103 Warszawa 00-761 Warszawa Tel. +48 58 32 33 254 Tel. +48 58 350 6262 Tel. +48 22 318 0105 Tel. +48 22 380 2125 Fax +48 58 30 11 341 Mob 48 602 116 816 Fax +48 22 318 0099 Fax +48 22 380 2101 magdalena.piechota- [email protected] [email protected] [email protected] [email protected]

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