Real estate news

LOKALE IMMOBILIA | NEWS Office

406,000 sqm

the amount of office space leased in Warsaw in the first half of this year

Source: JLL

Torus with new office project in Gdańsk

Developer Torus has launched construction work on its Format office project in Gdańsk. The five-floor scheme will comprise over 15,700 sqm of leasable space and is scheduled to be completed in the second quarter of 2021. It was designed by the APA Wojciechowski architectural studio and is expected to be certified in the LEED system at the Gold level. Torus has to date completed more than 120,000 sqm of office GLA in the Tri-City market. The company is now working on its Officyna and Alchemia office investments in Gdańsk.

BRIEFS

BGK TO MOVE INTO WARSAW’S VARSO PLACE COMPLEX

Bank Gospodarstwa Krajowego (BGK) has leased 12,400 sqm of office space in the Varso Place mixed-use complex, which developer HB Reavis is now building in downtown Warsaw. The tenant will take up space in the Varso 2 building of the complex and will move into the property in the spring of next year, with the lease agreement having been signed for a period of five years. Varso Place will consist of three buildings (including a skyscraper designed by Foster + Partners) and will comprise a total of 144,000 sqm of leasable area.

PROFBUD COMPLETES VECTOR + OFFICES IN WARSAW

Developer and investor Profbud has obtained an occupancy permit for its Vector + office project in Warsaw. The scheme is located near the intersection of ul. Prymasa Tysiąclecia and ul. Obozowa in the Wola district of the city and offers more than 13,500 sqm of leasable space. The development features a BREEAM Interim certificate for energy efficiency and environmental performance at the Very Good level. Profbud’s portfolio now also includes a number of ongoing residential investments in Warsaw and Łódź.

WARSAW’S WOLA CENTER TO BE RE-COMMERCIALIZED

Developer LC Corp is looking for tenants for its Wola Center office complex in Warsaw. The property, which is located in the Rondo Daszyńskiego area in the city’s Wola district, is currently fully leased out, but in the third quarter of next year its anchor tenant, Getin Noble Bank, will move to the nearby The Warsaw HUB complex, vacating 18,000 sqm. Nuvalu will support the landlord during the re-commercialization process. Completed in 2013, the Wola Center complex comprises four buildings totaling 31,000 sqm.

EXPERT INTERVIEW

THE NEW BUSINESS CENTER OF WARSAW

The new office hub in Warsaw’s Rondo Daszyńskiego area will continue to attract large tenants. Ghelamco Poland, one of the most active developers there, is planning further investments in the neighborhood, reveals Jarosław Zagórski, commercial and business development director at the company

INTERVIEW BY ADAM ZDRODOWSKI

WBJ: Several very large lease deals have recently been signed in the Rondo Daszyńskiego area. Judging by the enquiries you are getting, can we expect to see more major transactions there later this year?

Jarosław Zagórski: Yes. According to JLL data, the biggest leases in H1 2019 were signed by banking and insurance sector firms. They included an 18,500sqm pre-let by Getin Bank in The Warsaw HUB and an around 20,000-sqm pre-let by Warta in Warsaw UNIT. These transactions show the attractiveness of the Rondo Daszyńskiego area and the projects we are building there. The Warsaw HUB is very attractive to tenants. We have signed a contract with Atradius (1,500 sqm), one of the leading insurers in the financial and debt collection market. The complex will also be home to, among others, Standard Chartered’s global business services center (3,600 sqm). We are currently in the final stage of negotiations with several significant tenants. I think we will be able to announce them by the end of the year.

Who is now driving the demand for office space in the area?

The Rondo Daszyńskiego area is now the new business center of Warsaw. Recent transactions show that this area is a popular choice for companies from the banking and insurance sectors. IT companies are also among the companies interested in our projects.

This part of the Wola district has already become one of the biggest office hubs in the Polish capital. Are some people’s fears that the boom will result in the creation of another neighborhood with an office monoculture justified?

I completely disagree that the Rondo Daszyńskiego area will become an office monoculture. It is enough to look at the projects that are being created there. The Warsaw HUB itself will have retail, gastronomy and hotel functions. Tower “A” of the complex will host Crowne Plaza and Holiday Inn Express hotels. Tenants from the retail sector will include a Biedronka supermarket, a Zdrofit fitness club, a Rossmann drugstore, and McDonald’s and Olimp restaurants.

Just next to it, the 19. Dzielnica residential project is being built. The Asbud company is planning to build new apartments here. Nearby, there will also be the Browary Warszawskie and ArtNorblin complexes. Echo Investment is planning a multifunctional complex on ul. Towarowa. Tourists are attracted by the Warsaw Uprising Museum and Plac Europejski. Most of the planned new projects will have well-designed public spaces. Additionally, there is a great public transport system there – subway, trams, buses, railways and modern bicycle paths. I think that in less than two years we will see it become a lively and attractive part of modern Warsaw. Thanks to its residential, gastronomic and public space functions, the whole area will not be closed after working hours. When you look at how Plac Europejski operates, you can already see it now.

How much space is Ghelamco now building in the Rondo Daszyńskiego area?

The Warsaw HUB and The Warsaw UNIT are currently under construction. Across its 113,000 sqm of space, The Warsaw HUB will offer office areas, a conference center, hotels, a convenience center, a fitness club and coworking space. At over 200-meters tall, the Warsaw UNIT skyscraper will provide around 57,000 sqm of modern office space across 45 floors.

What are your further development plans there?

Ghelamco Poland is currently preparing several large projects there. We are now focusing on completing the construction of The Warsaw HUB and Warsaw UNIT. We will announce further projects next year.

Jarosław Zagórski, commercial and business development director at Ghelamco Poland

LOKALE IMMOBILIA | NEWS Residential

Hospitality

Robyg enters Poznań market

Residential developer Robyg, which is mostly active in Warsaw and Gdańsk and has recently launched its first project in Wrocław, has now announced its first housing investment in Poznań. The planned scheme will be located in the city’s Ostrów Tumski historic area and will comprise approximately 1,400 apartments. Poznań is an excellent market to enter, argued Robyg’s board vice president and CFO Artur Ceglarz. He noted that in Q1 2019 apartment sales in the city grew by 36 percent. “The numbers speak for themselves,” Ceglarz said.

BRIEFS

MORE APM APARTMENTS ON SALE IN WARSAW

Developer APM Development has launched sales in the second phase of its Cristal Park Residence luxury residential project in Warsaw. On offer are apartments sized from 85 sqm to 188 sqm and located in four buildings called Onyx Villa, Topaz Villa, Amethyst Villa and Beryl Villa. The Cristal Park Residence scheme is being built near the Park pod Skocznią green area in the Mokotów district of the city and will consist of nine low-rise buildings. APM Development was established in 2005 and has to date completed more than 1,000 housing units in the Polish capital, mainly in the lower-middle and upper-middle segments of the market.

PHN WITH BUILDING PERMIT FOR WARSAW SCHEME

Warsaw Stock Exchange-listed, state majority-owned real estate developer and investor Polski Holding Nieruchomości (PHN) has obtained a building permit for its planned Młoda Białołęka residential project in the Polish capital. The scheme will be located on ul. Geodezyjna in the Białołęka district of the city and will comprise approximately 500 apartments. The first phase of the development, for which construction is scheduled to begin in the final quarter of this year and be completed in Q3 2021, will deliver 174 housing units.

YIT BUYS LAND FOR MORE WARSAW APARTMENTS

Finnish developer YIT has bought a plot of land in the Mokotów district of Warsaw on which it will build a residential project comprising almost 300 apartments. Construction work on the planned scheme, which will be called Nordic Sadyba, is scheduled to launch in Q4 2019. YIT entered Poland over three years ago and is currently working on four other housing developments in the Polish capital. The company is also planning a major co-living investment in Mokotów.

Radisson adds two hotels to Polish portfolio

Hospitality company Radisson Hotel Group and investment and hotel group Zdrojowa Invest & Hotels have signed an agreement regarding the opening of two new Radisson hotels in Polish resorts. Radisson Resort Szklarska Poręba in the Karkonosze Mountains will offer 104 rooms and will open for business in the coming winter season. In the future, a second phase of the project with additional rooms and apartments is to be developed. Radisson Resort Kołobrzeg on the Baltic coast will comprise 209 rooms and is to be ready in the summer of next year. After the two openings, the Polish portfolio of Radisson Hotel Group will consist of 18 hotels operated under five brands.

SAVE THE DATE

ULI’s Places + Spaces conference, September 10, Warsaw

The Urban Land Institute is the oldest and largest network of cross-disciplinary real estate and land use experts in the world. The ULI is its members – delivering the mission, shaping the future of the industry, and creating thriving communities around the globe. The ULI has been active in Europe since the early 1990s and today it has over 45,000 members worldwide.

Places + Spaces is a year-long series of events focused on issues that impact cities. Organized by ULI Poland, the meetings present high-profile, international projects and speakers to discuss how “best practice” development principles and initiatives can be adapted to deliver positive impacts to Warsaw and other Polish cities. Each event, focused on one topic, is envisioned as a two-hour, theatre-style presentation for 80+ participants and a panel discussion, followed by a mixer.

On September 10, we will focus on “Recreating neighborhoods” and the biggest challenges of urban re-development. There is a number of very insightful speakers confirmed, including Alexandra Notay, an internationally recognized expert on build to rent, place-making and sustainable urban development; as well as Maria Vassilakou who has been the Vice Mayor of Vienna in 2010-2019, responsible for the city’s transformation and its smart framework. Another esteemed guest will be architect Viggo Haremst from Henning Larsen Architects who will deliver insights to his practice’s design methodology, while Lars Funding will discuss Urban Rigger, a concept that aims to solve the shortage of affordable housing in urban areas with floating sustainable container villages. More on poland.uli.org.

Interview with Dorota Wysokińska-Kuzdra, chair of the Urban Land Institute Poland

How is the Urban Land Institute different than other such organizations?

At the ULI, we provide a learning and networking platform for all real estate players. We are a network of people in every profession and sector, in every career stage. Outstanding people and leading companies are our members. What we share is a commitment to exchange ideas and experiences, to learn best practices from each other, to inspire and to work together. And all that is worldwide, because the organization operates across six continents, in 81 nations. We are also non-profit and non-political. That is especially important when working with local authorities that expect trust and transparency. We are able to show municipalities how to create development strategies and inspire them with best practices brought from around the world.

What does the Urban Land Institute membership give?

When you join the ULI, you can enjoy discounts on conferences, workshops, webinars, and other ULI events worldwide. There is plenty of books, reports and research papers available. Our case studies provide global examples of proven real estate projects that are financially successful, including access to costs, trade-offs, the challenges faced, and the lessons learned. We also focus on sharing know-how across the industry, one can expect lots of opportunities for networking and to give back, by mentoring, speaking or serving on advisory panels. Our Navigator programme matches you with engagement and volunteer opportunities specific to ULI members to learn, lead, and grow by advancing your career and making an impact on your community. We have a growing library of member-generated content and ideas that includes panel reports, District Council events, industry reports, Product Council agendas, all in one place and searchable.

What are your plans for the future?

After the very successful ULI Poland Annual Conference 2019 we are already working on next year’s topics and expert line-up. So far, the edition this year has been one of Poland’s biggest events to define trends and bring together investors, developers, architects, urban planners and innovation experts, with real impact on the evolution of urban spaces. You can expect more details to be revealed later, but make sure to save the date on April 1-2, 2020.

PLACES + SPACEs

RECREATING NEIGHBOURHOODS

Tuesday 10th September 2019, 5:30pm Winosfera Theatre, Warsaw

Lars Funding

Chairman Urban Rigger Aps Copenhagen

Viggo Haremst

Partner & Design Director Henning Larsen Architects Copenhagen

poland.uli.org

Alexandra Notay

Build to Rent Fund Director PfP Capital London

Maria Vassilakou

Vice Mayor and Deputy Governor Vienna 2010 - 2019 Marc Lebbe

Managing Director Liebrecht & wooD Group Ghent

Nicklas Lindberg

CEO Echo Investment Warsaw

The Warsaw Spire tower has recently been acquired by Austria's Immofinanz for approximately €386 million

CHANGES IN THE FLOW

The Polish commercial real estate investment market has been going from strength to strength of late. New investors are increasingly driving its remarkable performance

BY ADAM ZDRODOWSKI

Poland’s commercial property market has continued to attract more and more foreign capital in recent years, with the total 2018 transaction volume having exceeded €7.2 billion. Although unlikely to beat that record, this year’s volume is also set to be very high. While the market has been awash with international investors’ money for a long time now, the sources of the incoming capital have changed a lot over the past few years. Funds from new geographical directions – until recently not represented in the country – have become big buyers.

GROWING POOL

According to Cresa data, Western European investors remained the dominant force last year, accounting for investments valued at a combined amount of more than €2.8 billion – a significant increase on 2017. They were followed by US investors, who invested over €1.5 billion. “Going forward, Poland is likely to see increased investor interest coming from the US, Western Europe and Asia following its recent upgrade to the developed market status on the FTSE Russell index,”

argued Krzysztof Stempień, senior advisor, capital markets, at Cresa.

The pool of foreign real estate investors active in Poland has been growing. Additionally, those investors are now looking at a bigger pool of assets than before, said Przemysław Felicki, director, capital markets, at CBRE. Most foreign property investors in the country were until recently focused on core assets – new buildings in central locations and with long-term lease agreements – or so-called opportunistic assets that are offered at a discount.

The latter category includes buildings with high vacancy rates and older buildings with remodeling potential. Today, the Polish market is also increasingly attracting investors who are interested in buildings in non-central locations and with shorter lease deals, Felicki said. He explained that this trend is mainly driven by the very good shape of Poland’s economy and the strong leasing market fundamentals in both the office and the logistics sectors, which stand out in Europe.

Philippine fund ISOC Group earlier this year bought Business Garden Wrocław offices for over €95 million

NEW STREAMS

The increase in the number of foreign investors actively buying commercial property in the country has meant a major shake-up of the investment scene and a noticeable re-division of the investment pie. A look at where the capital invested in Polish commercial real estate in 2015 and in 2018 came from (see graphs) reveals how much changed in this regard within just three years and how quickly newcomers became a significant (and growing) force in the market.

Savills data shows that in 2015, European and North American capital jointly accounted for more than 70 percent of the investment volume in Poland. Domestic investors’ share was 19 percent, but the volume was then much lower than today and stood at slightly over €4 billion. Three years later, European and North American investors still accounted for 65 percent of the invested capital, but the vast majority of the remaining investments were accounted for by investors from South Africa, Asia Pacific and the Middle East.

South African investors were behind some of the biggest investment transactions closed in the Polish market since 2015. The 2016 purchase by Redefine Properties of a 75 percent stake in an Echo Investment portfolio for €891 million is one of the largest deals in the market’s history. In that year, South African investments totaled almost €1.8 billion, which represents a nearly 40 percent share in the aggregate volume. Due to factors including increasing competition from investors coming from such new directions as Asia, the figure has since gone down.

ASIAN TSUNAMI

The wave of the new capital from Asia Pacific has been spectacular. While in 2015 the region’s investors had no share in the Polish investment pie, in 2018 their share already stood at 11 percent. Preliminary Savills estimates show that in H1 2019 Asian Pacific capital accounted for as much as 36 percent of the total investment volume. The most money is now flowing from South Korea and Singapore, with investors from Japan and the Philippines also being active.

Asian investors became active in Central and Eastern Europe in 2016-2017 when they signed a number of big-ticket agreements in the industrial sector (including those for the acquisition of P3 and Logicor portfolios in several of the region’s countries. “Although the industrial sector continues to feature prominently on the radar of Asian investors, we are seeing a growing focus on portfolio diversification, with some investors looking for office and retail assets,” Stempień noted.

Examples of Asian investments in those sectors include the purchase by Philippine fund ISOC Group of Business Garden Wrocław offices for over €95 million and the acquisition of the Galeria Katowicka mall in Katowice by Malaysia’s EPF fund for €300 million. “[Asian] investor interest in the Polish commercial