Park Postępu was one of the developments to recently obtain bank financing Courtesy of Echo Investment

Developers Echo Investment and Ghelamco, some of the largest players in the Polish commercial property market, have been on the lips of the country’s real estate world in recent weeks, after the two companies secured bank loans for a total of four large office building schemes in Warsaw, Poznań and Katowice.

The news came at a time when bank financing is, for the vast majority of developers, considerably difficult to come by and nourished hopes that some improvement in the difficult situation in the property market is actually on its way. In the opinion of the market’s analysts, however, Echo Investment’s and Ghelamco’s success does not necessarily herald a larger trend and may just highlight banks’ readiness to finance top-quality property projects which have already begun.

Creditable developments

In mid-June, Kielce-based developer Echo Investment announced it had obtained loans from the German banks Eurohypo and Westdeutsche Immobilienbank for its under-construction Park Postępu and Malta Office Park office projects located in Warsaw and Poznań, respectively. The credit lines, whose values amounted to E50 (zł.218) million and over €31 (zł.135) million respectively, will be spent on refinancing building costs of the Warsaw project as well as refinancing the building costs of the first stage and financing construction of the second stage of the Poznań scheme.

“Apparently decisions concerning financing of good and secure projects may be taken without needless delay, especially in the situation where more and more positive signals are coming to us from various sectors of the market,” Piotr Gromniak, president of Echo Investment’s management board, said in a statement.

Also, Belgian developer Ghelamco earlier this month announced it had secured E60 (zł.260) million from Bank Pekao for its Crown Square and Katowice Business Point office schemes. The developments, construction on both of which is already underway, are located in Warsaw and the Silesian city of Katowice, respectively, and scheduled for completion in Q1 and Q3 2010.

“The transactions completed now are the first signs of positive changes in the market and I believe we will see more such transactions in the near future,” commented Jeroen van der Toolen, managing director of Ghelamco Poland. He added that banks had re-evaluated their strategy and lending conditions after financing had been granted to many inexperienced parties with badly designed projects and that after a natural “cleaning up” process the average quality of developments would now increase.