The 16th annual Expo Real fair was proof that after years of stifled growth and tentative investment decisions, optimism has returned to the property market. The strong Central European markets prompted a positive mood and remained in the spotlight throughout the three-day event.
“There was a positive atmosphere at Expo Real 2013 – we are on the brink of a turning point. The mood is continuing to improve and we are seeing an increased willingness to do business right across the board,” said Jan-Willem Bastijn, head of EMEA Capital Markets at Cushman & Wakefield.
As many as 36,000 people from 65 countries visited the fair in Munich on October 7-9. Apart from Germany, the top 10 countries in terms of representation at Expo Real were the UK, the Netherlands, Austria, Switzerland, France, Russia, Poland, the Czech Republic, the US and Luxembourg.
The city of Łódź was awarded at Expo Real for the Ludwik Grohman factory revamp project
Courtesy of Lodz SEZ
Factory revamp awarded
The city of Łódź was awarded the John Jacob Astor Award for the redevelopment of the 19th-century Ludwik Grohman factory. The prize included a 20-sqm exhibition area at Expo Real 2014 worth €10,000. The award was accepted by the city’s mayor Hanna Zdanowska.
The revitalization project was launched in 2011 and took two years to complete. It entailed the renovation and extension of the former industrial buildings while preserving their historical character, creating a modern office building for the headquarters of the Lodz Special Economic Zone, the project’s investor, as well as a culture and conference center for more than 250 people.
With officials from over 20 cities and six of Poland’s voivodships, the country was by no means underrepresented. Cities offered investors both land and developed real estate.
The north-central city of Bydgoszcz has a very comprehensive strategy aimed at attracting investors, including not only tax incentives, road infrastructure and utilities for the land on sale, but also by creating enclaves, such as the Bydgoszcz Technology Park, which provide highly skilled labor.
Bydgoszcz has prepared a comprehensive strategy to attract investors
Courtesy of City hall of Bydgoszcz
“Today you can’t simply offer land for investment, you have to offer a package: together with the human resources and leisure activities,” said Edyta Wiwatowska, manager at Bydgoszcz City Hall.
The southern city of Wrocław, in the Lower Silesia voivodship, showcased several pieces of land for sale, some of which contain 19th-century buildings that once housed hospitals. Officials are counting on foreign investors to purchase these properties and refurbish them for commercial, office, services or residential use. The buildings are considered monuments and have to be redeveloped according to the requirements of the curator of historic buildings, which for some investors is a significant deterrent.
However, Iwona Dyszkiewicz, director of the Marshall’s Office of Lower Silesia said, “A monument is an added value, and should not be perceived as a nuisance.” One of the major benefits is that the state will reimburse 50 percent of all investment outlays incurred to refurbish buildings which are entered in the register of monuments. Moreover, the bulk of these properties are located in the very heart of the city.
Almost all representatives agreed that investors are most interested in plots of land situated in city centers, making them an ideal location for retail or office projects.
“Downtown properties are selling like hot cakes. Some two years ago we had a tender, where a Warsaw-based company raised the offer price from zł.1.6 million to zł.2.5 million for a tiny plot earmarked for office development,” Adam Zakrzewski, director of Toruń’s investor assistance office.
One of the conferences held at the fair was devoted specifically to Poland’s real estate market. The panelists were international investors active in the Polish market, such as Franz Jurkowitsch, CEO of Warimpex, Martin Sabelko, managing director CEE at CBRE Global Investors and Daniel Harris, managing director at Tristan Capital Partners, as well as Poland-based investors: Marcin Juszczyk, member of the board at Capital Park and Waldemar Olbryk, managing director at Skanska.
Mr Harris pointed out that though the number of deals made in 2013 has decreased, their sizes are getting bigger. He also added that if we take out Russia, “the majority [of all the money invested in CEE] is going to Poland, because that’s where the growth is coming from.”
Mr Olbryk from Skanska did say that there is worry about the continuity of office demand in the the BPO/SSC market which is driving growth in Poland’s office sector, but added that the studies his company carried out suggest that a lot of business in the sector is in fact still growing, with companies shifting from the Far East to Poland.
The panelists agreed that while office developers look almost exclusively to big cities and their centers, retail projects are beginning to mushroom in smaller cities, even medium-sized towns like Bielsko-Biała or Stalowa Wola, which has a population of 65,000. According to Marin Sabelko from CBRE, the key to a successful retail investment in smaller cities is to have the dominant project. “As long as you are dominant, you win, but if you are second in line, you lose already,” Mr Sabelko said.
As to the source of the investments, Mr Sabelko said that even though Poland is mainly attracting funds from US and German investors, many Asian funds have also become interested in it. Poland is the top destination for Asian investors in the CEE region due to its size and stability.
“Chinese and other investors are looking for a record, the number of deals, the size of international investors’ [involvement]. They look at how Poland is seen by international investors,” Mr Sabelko explained.
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