Business perspectives and investment potential in the Polish real estate market
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Business perspectives and investment potential in the Polish real estate market
Marek Kutarba
Chief Publishing
Officer at Gremi
Media S.A.
P
oland is still one of the fastest growing economies
in the world. It is easy to see that this is the case if
you look out the window from your office or travel Poland is a country
around the country on new motorways and roads. of good investments
There is practically no bigger city that does not bloom under
the influence of new numerous investments. This is particu-
larly evident in the real estate market. Numerous infrastruc-
ture investments, new offices, shopping malls and residential
properties are visible at almost every step. And this does not
only apply to Warsaw, the largest Polish city, but also to many
other cities and smaller towns. This makes Poland still one of
the most interesting places to locate new investments, attract-
ive and stable.
This is also shown by the results on the real estate market. In zoning law), or by clarifying old doubts, as is the case with tax
2019, prices in this market increased by 10% and in the last four regulations (especially with regard to VAT).
years by 30%. And importantly, despite rising prices, demand All this makes us once again undertake the effort to prepare
still exceeds supply. And not only in the residential market, but a practical guide to the Polish real estate market for you. As in
also in the office or warehouse market. This trend will also con- previous years, we want to present you with a picture of the
tinue in 2020. Polish real estate market. That is why we write about new in-
At the same time, requirements for new investments are teresting investments, market trends, new legal regulations, or
increasing. The trend towards buildings that are “eco” and about the most important or innovative companies operating
“smart” is beginning to prevail. Environmentally friendly and on this market. We hope that this knowledge will allow you to
increasingly intelligent, and at the same time much cheaper to understand the Polish real estate market, proving at the same
maintain and operate. This should not come as a surprise. This time that Poland is an excellent location for new, even better
direction is also actively supported by the Polish legislation. and more innovative investments. A country that is stable and
In 2021, regulations promoting energy-efficient buildings will guarantees an adequate return on invested money. I invite you
come into force. There is also growing interest in new types of to read the next, fifth edition of Time For Polska.
real estate, such as aparthotels or co-living. Polish law is also
changing dynamically. More and more regulations are sup-
porting the development of new investments, either by intro-
ducing new regulations (e.g. in the area of construction and
4
The largest network
of law firms in Poland
operating under the auspices
of the “Rzeczpospolita”
daily newspaper
WWW.KANCELARIERP.PL
W W W . K A N C E L A R I E R P. P L
The coming years for Gdynia promise
to be very fruitful, which will only improve
the high position of the Tri-City
on the office space market
Katarzyna
Gruszecka
– Spychała
Deputy Mayor
of Gdynia
W
hen it comes to attracting investors’ attention ago we were developing a strategy for the future of Gdynia,
and creating new office space, which also in- and one of our priority projects was called „Science and work”.
volves new employment opportunities, Gdynia What we were able to do to create new office space in the city was
still has a lot of potential. Future investments to create good conditions for investors so that business could
can only increase the city’s development dynamics. In the years create the space itself. The prize awarded by ABSL is a reward
2021-2023 an increase in office space by over 100,000 square for this effort.
meters is planned. Such a high growth dynamics should bring Apart from investment projects, Gdynia always takes care of
as many as 13 thousand new jobs in business services. its residents in the first place, creating pocket parks, meeting
Therefore, the coming years for Gdynia promise to be very places and public facilities that encourage people to spend time
fruitful, which will only improve the high position of the Tri- outdoors. The city has always appreciated the high quality of
City on the office space market, especially taking into account life it provides to its residents, also by organizing many sports
the fact that in the near future the city will discuss the details of and cultural events, such as the Half Marathon World Athletics
the land use plan for an area of 40 hectares – the last such a large Championships, Ladies’ Jazz Festival or Open’er Festival.
plot, remaining to be covered by the spatial plan. Gdynia is a city for which entrepreneurship is something nat-
The main goal of the city is to create a joyful and comfort- ural. We create support for small, medium and large entrepren-
able place to live, which meets the highest requirements of the eurs according to their needs – the aim is for business to develop,
contemporary lifestyle. We are constantly trying to improve the but also for the inhabitants to enjoy the time spent in Gdynia.
quality of life for residents as well as investors. High economic development is a condition for implementing
Nevertheless, it is always a good feeling when the city’s efforts ambitious city program.
are appreciated outside. In 2019, Gdynia was awarded in the In addition to make Gdynia’s residents as well as visitors life
LivCom Awards – an extremely prestigious, worldwide ranking easier, the city also plans to constantly improve the road infra-
that focuses on the quality of life, rewarding and identifying structure as well as the super modern and environmentally
those cities where it is simply the best. Last year’s edition, in friendly public transport, to which we have recently purchased
which Gdynia was awarded third place in the category 150,000 55 buses, 30 trolleybuses, which can partly be driven without
– 400,000 residents, focused heavily on problems related to cli- energy supply, and more than 20 modern electric buses, to-
mate change. gether with the reduction of car traffic in the city center, will al-
Domestically, the city was also appreciated by the Associ- low residents to reach their destination faster. Although the city
ation of Business Service Leaders (ABSL), which for the second is proud of its air quality, it is always better to introduce modern
time awarded Gdynia an award in the category of Supporting solutions as early as possible.
Cities for the support of modern business services sector. Constant development and high quality of life make Gdynia
A large dose of patience is needed to plan the city’s develop- a very attractive city for both residents and investors.
ment in the long term – there are no quick results. A few years
The WSEZ “INVEST-PARK” has already
been awarded several times
in the international ranking of fDi Magazine,
including an award for the quality
of services provided to investors
Piotr Sosiński
President
of Wałbrzych Special
Economic Zone
“INVEST-PARK”
T
he WSEZ “INVEST-PARK” was established in ility of taking advantage of preferential conditions for business
1997. At present, the Zone is one of the most dy- activity by entrepreneurs. It is worth mentioning that small
namically developing investment locations in and medium sized enterprises can benefit even more. Our aim
Poland, comprising 29 districts in Dolnośląskie, is to encourage potential investors to become familiar with the
Opolskie and Wielkopolskie Provinces. new rules, procedure, preparation and submission of applica-
– The WSEZ “INVEST-PARK” has perfectly located invest- tions. At the same time, we try to make the process of analysis
ment areas in south-western Poland, as well as finished indus- and decision making as short as possible, which will allow for
trial halls and office space for rent. Apart from infrastructure quick implementation of new projects. The new regulations
and location, our employees are also well qualified. The Zone did not interrupt the work of the WSEZ “INVEST-PARK”, on
offers both income tax exemptions and comprehensive sup- the contrary, the current regulations are more transparent
port for entrepreneurs – assistance in locating the investment and the application procedure for support is simplified. The in-
and conducting business activities, e.g. free training, lower terest of serious investors in the Wałbrzych Special Economic
energy costs or assistance in finding employees and business Zone “INVEST-PARK” is still very high, which of course makes
partners. The Zone has already been awarded several times in us very happy – sums up Dr Piotr Sosiński.
the international ranking of fDi Magazine, including an award
for the quality of services provided to investors. For over two
decades it has been a key factor in the economic development
of Lower Silesia, Opole and Wielkopolska – emphasizes
Dr Piotr Sosiński, President of the WSEZ “INVEST-PARK”.
“Our aim is to
The zone has already attracted over 250 investors, whose
investments exceeded PLN 30 billion, and about 60 thou- encourage potential
sand people found employment in companies operating here.
Among these investors there are global entities as well as me- investors to become
dium, small and even micro-enterprises. One of the four com-
panies in the WSEZ “INVEST-PARK” operates in the automo- familiar with the new
tive industry or related sector.
– Since 2018, special economic zones in our country have rules and procedure
of submitting
been operating on the basis of new legal regulations and imple-
menting the investment policy under the motto “Polish Invest-
applications”
ment Zone”. The new formula of the zones’ operation assumes
covering the entire investment area in Poland with the possib-
Supporting the current development
dynamics and its constant balancing seems
to be the most important issue
for the coming yearsJoanna
Wojnarowska
Partner
at Baker McKenzie
2
019 was another record year in terms of volume of pendent title to the land (or part of it). The introduction of this
transactions and real estate investments in Poland. institution would enable the implementation of new projects in
The upward trend has continued for practically a places which by definition are excluded from the interest of po-
long time in all sectors, except retail. The increase in tential investors.
demand for investment land translated into an increase in real Another issue that would allow the dynamic development
estate prices, which, on the one hand, is a positive signal, but on of cities to be maintained is an open approach to the issue of
the other hand, if it continues, it may be a negative factor affect- downtown density, especially given the scarcity of local land use
ing Poland’s investment attractiveness, constituting a barrier plans and the content of already existing studies. It is necessary
for foreign entrepreneurs. Therefore, supporting the current to conduct an open dialogue between the city authorities and in-
development dynamics and its constant balancing seems to be vestors, enabling the maximum intensity of development while
the most important issue for the coming years. However, it will maintaining the principles of sustainable development.
not be possible without a critical look and coping with serious When looking for constructive solutions, one should take
problems, such as in particular the growing lack of supply of in- into account the above mentioned dynamics, which character-
vestment land. izes the real estate market along with urban development, the
Developers and investors find many ways to solve the prob- needs of the inhabitants and the corresponding activities of de-
lem of investment land supply, such as revitalization of real velopers, who expect effective, comprehensive legal solutions
estate or change of its designation, as a result of which, for ex- supporting them and meeting the expectations of their busi-
ample, many post-industrial areas gain a new designation and ness. It is currently one of the biggest challenges in coping with
again become part of the urban structure. Although creative, the increasingly noticeable decrease in the supply of investment
these are rather one-off solutions, and the land supply problem land.
will only grow in the long run without appropriate solutions.
It seems that one of the concepts worth considering and pop-
ularizing is a multi-layered real estate institution, commonly
known as a 3D plot. Attempts to introduce this concept into
our legal system, which successfully operates in various vari-
ants in France, Germany or the United Kingdom, have started
long time ago, but without a satisfactory effect.
A multi-layered ownership or development right is simply
the possibility for various independent entities to carry out
construction projects on different levels of the land (above and
below its surface), with each investor having a strong and inde-Out of all the EU Member States, Poland
offers the highest level of investment
support – depending on project location,
even up to 50% of eligible costs (in the case
of large companies). The aid is granted
in the form of corporate income tax
exemption (longest period in the EU – from
10 to 15 years tax free) and cash grantsGrzegorz
Słomkowski
Executive Vice
President of Polish
Investment
and Trade Agency
(PAIH)
P
oland is the perfect business partner for investors de- Poland has invested greatly in its educational system. Thanks
veloping high-tech product and services thanks to, its to which, it is the largest academic hub in the CEE region and
unique tech and business-oriented environment. As a proud of the fact that there are major higher education centres
Member State of the EU, located in the heart of Europe, in all regions of the country. There are 360 higher education
our country is also a good choice for foreign companies wishing to institutions, where around 1.2 million students are currently de-
benefit from our large internal market, central location and access veloping their skills. Within this large pool of students, as many
to the EU’s common market, which Poland is a part of. as 25% choose to study science, IT and other technical subjects.
Poland specializes in high quality eco-food production, bio Poland also offers access to a network of international schools
cosmetics, custom-made yachts, furniture and the production covering all stages of education. In addition, there are 160 re-
of technically advanced car and aviation parts. But not only. IT/ search and development institutes specializing in different
ICT is one of the leading, fastest growing and most innovative areas.
areas of the Polish economy, offering a wide range of services The obligatory introduction of coding lessons in primary
and products on global markets. schools was the beginning of great interest in programing
When thinking of world class Business Service Centres – amongst Poles. Now, about half a million people work in the Pol-
think Poland! Poland’s Business Service Sector’s (BSS) offer is ish IT/ ICT sector. Did you now that more than 20% of all the IT
unique. There are already over 1,400 Business Service Centres specialists and software engineers in the CEE region are to be
spread all over the country. Polish cities such as Warsaw, found in Poland?
Kraków and Wrocław play a key role as BSS hubs, both on a As the global demand for new IT professionals continues
global and regional scale. They already have an established to grow, Poland due to international recognition, is seen as an
reputation with the major players in this market, which places attractive place to develop ICT solutions. Many multinational
them among the primary choices when new investment are be- companies, including Facebook, Microsoft, Google, Oracle,
ing considered. Not only does Poland offer so called “tier 1” cit- IBM, Intel or Symantec have established their high-tech busi-
ies for advanced business operations, but it also gives access to ness operations in Poland. Fintech is becoming the main force
talent in smaller BSS centres. Among them are the Tricity in the behind the rapid growth of the Polish tech industry. The large
North, Łódź in the centre of the country, Rzeszów and Lublin in number of fintech projects implemented by Polish start-ups,
Eastern Poland, Poznań in the West and Katowice in the South. mature enterprises and banks makes the Polish market one of
In total, today, Poland hosts international BSS operators in at the most important centres of financial innovations in Europe.
least 16 cities and provides good opportunity for grow. For those interested in improving the efficiency of their fin-
Out of all the EU Member States, Poland offers the highest ancial services or wanting to find top solutions for their data
level of investment support – depending on project location, even centres, IoT or AI including quantum computing - Poland is the
up to 50% of eligible costs (in the case of large companies). The aid right place to be!
is granted in the form of corporate income tax exemption (longest Looking for BSS opportunities or looking to establishing
period in the EU – from 10 to 15 years tax free) and cash grants. your R&D operations? Look no further! We at the Polish Invest-
Why has Poland succeeded as a BSS hub? Thanks to our tal- ment and Trade Agency (PAIH) are here to support your invest-
ented and well educated young people, who are fluent in many ment.
languages. Today, 300,000 of them work in this area. There
is no other country in Europe offering BSS services in 38 lan-
guages and no other place in Central Eastern Europe (CEE) of-
fering such high levels of proficiency in English!Partners 14
STR ATEGIC MEDIA PA RTNER:
STR ATEGIC PA RTNERS:
PA RTNERS:EDITOR IN CHIEF:
Marek Kutarba
LEA D EDITOR:
Ewa Matyszewska
LEA D JOUR NA LIST:
Tomasz Ciechanowski
PUBLISHER:
Gremi Media S.A.
Prosta Office Center
ul. Prosta 51, 00-838 Warsaw
PR INTING HOUSE:
Printfaktoria Sp. z o.o.
ul. Parowcowa 10b
02-445 Warszawa
The articles presented in the magazine
were prepared in cooperation
with companies’ representatives.
timeforpolska.pl1 Market
overview PAGE 19
2 Cities
& regions PAGE 41
3 Company
profiles PAGE 47
4 Investments PAGE 53
5 Business cards PAGE 6718
1 Market overview
POLISH TAX
REGULATIONS
ARE CONSTANTLY Michał Thedy
Managing Partner
EVOLVING
at Thedy & Partners
T
axes should be relatively low, structures. These regulations include e.g. lion threshold to related and unrelated
the related regulations stable, (i) obligatory reversal of business costs in contractors (with some exceptions). It
clear and rational and the tax the case of late payments to contractors, seems that the new rules are too strict
authorities fair and co-oper- (ii) a lack of tax deductibility of business and there are expectations that they will
ating – probably that is what most of us cost as well as joint and several VAT liab- still be modified before they become en-
would like to experience in terms of tax- ility in the case of payments to bank ac- forced. Nevertheless, taxpayers doing
ation. However, as in all other areas of life counts which have not been reported for business in Poland should start getting
and business, the reality is unfortunately tax purposes, and (iii) new complex regu- prepared and in particular review their
more complex. lations regarding VAT split payment. holding and financing structures. This
The tax environment is still changing. Changes regarding a new withhold- is important as already on the ground
The new regulations impose more re- ing tax regime have been postponed of the current tax provisions, using the
strictions mainly in the compliance area again till mid-2020. The new rules mean withholding tax exemptions or lower
which will require further adjustments a new pay-and-refund tax system on tax rates, e.g. for dividends or interest
of procedures and supporting IT infra- qualified payments above a PLN 2 mil- payments, may be questioned in case of
structures lacking a business substance
and/or beneficial ownership status.
“The new regulations impose Another regulation that you definitely
need to take into account are the man-
more restrictions mainly datory tax disclosure rules which have
a very wide and unclear scope. They
in the compliance area which cause a lot of uncertainty as to what and
when to report and require a lot of ex-
will require further adjustments ternal consulting support.
Last but not least, the tax authorities
of procedures and supporting IT do not forget that they need to contrib-
ute to the state budget and are quite
infrastructures”
active in looking for further tax related
measures.
FOT. SHUTTERSTOCKTIME FOR POLSKA
NEW REGULATIONS
IN THE RESIDENTIAL REAL
ESTATE MARKET
P
oland still lacks apartments. assessment of banks’ creditworthiness
Compared to other countries and a less open approach to lending to
in the European Union and both developers and buyers.
even beyond, our housing in- Undoubtedly, it is necessary to intro-
frastructure does not look impressive. duce new legal regulations which will
Taking into account the European average stimulate the residential real estate mar-
(number of apartments per capita), the ket. Such regulations should also reduce
shortage is estimated at 2 or even 3 million the housing shortage.
apartments. On July 2, 2019 the President of the Edyta Kalińska
Previously introduced government Republic of Poland Andrzej Duda signed Audit Partner at BDO,
programs such as “Mieszkanie dla an amendment to the Act on the National Poznań Office
Młodych” (“Apartment for the Young”), Real Estate Stock. The purpose of the
“Mieszkanie Plus” (“Apartment Plus”) amendment was to increase the supply
or “Mieszkanie na Start” (“Apartment of land that can potentially be used by the The Minister of Development also in-
for Start”) have not brought spectacular National Property Stock by clarifying the formed that some changes are planned in
results. Only 860 apartments were built rules for classifying and transferring the the “Mieszkanie Plus” program. Accord-
under the “Mieszkanie Plus” program property. Centralization of the land bank ing to this declaration, private developers
(as of August 2019), although the original is definitely a step in the right direction. will be able to purchase land at reduced
plan was to build a total of 100,000 apart- One of the most important new reg- prices in order to build new apartments
ments. ulations concerning the residential real under this program. Although the details
As a country, we still have a lot of work estate market is the Act of 20 July 2018 on have not yet been clarified, such a change
to do. Unfortunately, there are many re- transformation of the right of perpetual may turn out to be beneficial for the res-
strictions that hinder the implementation usufruct for residential purposes into idential property market. It seems that
of housing projects. The main obstacles ownership. As of 1 January 2019, the right such actions may increase the number
are the lack of available land, its rising of perpetual usufruct ceased to exist and of apartments as well as their standard.
prices, as well as the scarcity of funds (in almost 2.5 million Poles became owners Additionally, it may also have a positive
Poland, most residential investments are of its land. The greatest benefits were en- impact on prices of newly constructed
still financed by bank loans). joyed by owners of flats in multi-family apartments.
Also the costs related to these invest- buildings, as previously they could not Plans for changes in the so-called “De-
ments are constantly increasing, which transform the right of perpetual usufruct velopment Act” are also still being dis-
is caused not only by high land prices but into ownership without the consent of all cussed. At the end of 2019, new informa-
also by higher costs of employers result- the residents of the building. tion on the inclusion of the draft of these
ing from, among others, Employee Cap- In 2020, further changes to the ex- changes in the list of legislative works of
ital Programs. isting regulations and programs are the Polish Parliament appeared. There-
We should also remember the microe- planned. The purpose of these changes fore, discussions between developers and
conomic risks. The economic downturn is to improve the housing situation in Po- the Office of Competition and Consumer
is undoubtedly linked to a more critical land. Protection are expected to return. The
Office of Competition and Consumer
Protection has resigned from plans to
“It is necessary to introduce liquidate the open residential trust ac-
counts, but plans to create a Develop-
new legal regulations which will ment Guarantee Fund. The amendment
to the “Development Act”, which is to
stimulate the residential real enter into force in 2020, will increase the
developers’ obligation to protect buyer’s
estate market” payments, which will probably result in
higher prices of new apartments.
21POSSIBILITY TO INVEST
IN NEW REAL ESTATE CLASSES
A
factor that has undoubtedly 24 June 1994 on the Ownership of Separ-
contributed to the stability of ate Premises. Despite certain difficulties,
real estate transactions in Po- these provisions allow the creation of
land is the legal institutions multiple-owner real properties. There
that give investors far-reaching legal are also court rulings confirming the in-
security for their investments. How- terpretation of the Act or other acts allow-
ever, the verification of the legal status ing investors to structure their projects
of real estate remains of fundamental effectively under the existing provisions
importance, including for the economic of law, even though they were not drafted
efficiency of an investment and risk min- Jakub Kutzmann specifically to apply to such “new” assets.
imization. In recent years, investors have Local Partner at White & Case in Warsaw Another positive development re-
been more and more willing to invest in garding Polish statutory law expected
new types of assets that cannot be clearly in 2020 is the planned amendments to
assigned to any of the typical real estate construction regulations whose funda-
classes, such as apartment hotels, condo legal and tax structuring are equally im- mental aim is to make it easier for in-
hotels and mixed-use investments. In portant. vestors to obtain construction permits.
the future, these “new” assets will likely In Poland, such investments are al- That, combined with a functional legal
attract significant interest. In such pro- most impossible other than through the system, provides a basis for optimism
jects, thorough due diligence and careful application of the provisions of the Act of for the future.
APART OR CONDO?
Aparthotels feature fully-equipped consider entering the market, either on
apartments while condohotels offer their own or in partnership with local
hotel rooms, in both cases typically developers.
Przemysław Kastyak rented on a short-term basis, with units As an additional advantage, de-
Partner at Penteris owned by private investors. velopers can act as asset managers after
With Poland becoming a popu- the project is completed, benefiting
lar tourist and business destination, from long-term extra revenue on top of
T
the condo- and aparthotel formula is development gains.
he Polish economy contin- spreading not only into resorts, but also However, private investors should be
ues to grow meaning more large cities. prudent. The Consumer Protection Au-
wealthy customers for prop- This translates into opportunities thority has even launched a dedicated
erty investors and developers, for institutional investors, developers, campaign explaining the risks for less
and a promising business outlook. and operators specialized in such pro- experienced individuals.
This is opening up interesting options jects, as well as wealthy private indi- Whether apart or condo, institutional
in the apart- and condohotel market, viduals. investors can look forward to a host of
which is dynamically growing not least in Therefore, foreign operators with opportunities in Poland.
comparison with other property sectors. industry know-how should seriously
22TIME FOR POLSKA
SIMPLIFICATIONS
IN LEGISLATION REGARDING
REAL ESTATE TRANSACTIONS
AND PROPERTY DEVELOPMENT
T
he year 2019 saw a lot posit- previously binding regulations imposed
ive changes in the regulatory restrictions on the acquisition of plots
environment in Poland as re- as small as 3,000 square meters. Fur-
gards to real estate transac- thermore, as of 2019 an acquisition of
tions and property development. shares in companies holding less than 5
In December 2018 the Ministry of hectares of agricultural land is no longer
Finance published guidelines as to limited by any government pre-emptive
the VAT treatment of real estate deals. rights, whereas the previous limit was
The market practice developed in the also 3,000 square meters.
course of 2019 and now most asset deals Wojciech Koczara 2019 also saw the introduction of
are again subject to fully recoverable Partner, Head of Real Estate at CMS Poland a partial reform of a very common title
VAT. For several years, it was not clear to land, namely perpetual usufruct over
whether the sale of an income-produ- government land. Perpetual usufruct of-
cing real estate was subject to VAT, and ten has burdensome use limitations and
this ambiguity caused concern to in- cerns agricultural land sales, it has an the procedures to change them were un-
vestors when they applied for VAT re- impact on many other real estate trans- clear, time consuming and very expens-
funds. actions. The new rules allow anyone to ive. As of 2019, a holder of a perpetual
Another change involves the relax- acquire agricultural land with an area usufruct right is entitled to demand
ation of the rules on agricultural land smaller than 1 hectare, subject only to changes in the permitted purpose, sub-
acquisition. Although it primarily con- a government pre-emptive right. The ject to a reasonable fee.
FOT. SHUTTERSTOCKANOTHER
FRUITFUL YEAR
Mateusz Grabiec
ON THE POLISH Partner at Baker McKenzie
COMMERCIAL REAL pared to the countries of the so-called
old European Union. Ultimately, in 2019,
Poland could boast of increased interest
from investors from CEE countries and
ESTATE MARKET the Asian continent.
The security of the commercial real
estate industry was due to the scale of the
market, its liquidity and the developing
economy, therefore Poland has a chance
Comment by Mateusz Grabiec, Partner at Baker McKenzie to continue the path of rapid develop-
ment of the commercial real estate mar-
ket in the future.
Warsaw and the development of the of- In addition to positive macroeconomic
fice market in the largest regional cities. indicators, one of the most important
Statistics and A real boom is also visible in the ware- conditions for maintaining a high pace
house sector. It is currently a very profes- of development is to create and maintain
conclusions from many sional sector, divided into specialist cat- a friendly and stable legal environment.
analyses concerning egories including, apart from traditional Modern legal solutions can also be used
warehouses, city warehouses (last mile to stimulate or regulate the market.
the Polish commercial facilities, i.e. city projects allowing com- When assessing the existing legal en-
real estate market panies to minimize the time of delivery of vironment, it can be concluded that on
goods to the customer), cross-dock, typ- the one hand there are no specific barri-
in 2019 prove that ical build-to-suit halls or specialist pro- ers on the investment market that would
Poland remains a very duction halls. The development of altern- prevent investors from entering Poland.
ative assets, such as student houses or There are also qualified and experienced
attractive investment rental apartments, also plays an import- specialists from the sector of professional
market tant role in the development of the Polish services in the field of consulting and in-
investment market. Another interesting surance concerning the commercial real
T
trend which proves the maturity and at- estate market. It is also worth mention-
he most important parameter tractiveness of the Polish market is the ing the progressive standardization of
of this success is the record progressive compression of yields, thus contractual legal solutions functioning
volume of transactions, which reducing the differences in yields com- on the commercial real estate market
in the whole of 2019 amount-
ed to EUR 7.8 billion, beating the previ-
ous record in 2018 (EUR 7.2 billion). The
number of transactions is also impressive “The development of alternative
with 143 in 2019. To better illustrate this
result, it is worth recalling that 97 trans- assets, such as student houses
actions were recorded in 2018 and 2017.
- (79) The increase in market liquidity is or rental apartments,
an important factor in the assessment of
a market by investors. also plays an important role
in the development of the Polish
Offices still dominate the total volume
of transactions. Apart from the transac-
investment market”
tion value in this sector, it is worth noting
both the lowest vacancy rate in 7 years in
24TIME FOR POLSKA
within specific investment products.
This allows investors to increase the ef-
“Although or indirect reference to commercial real
estate market participants, including
fectiveness of concluding transactions by
concentrating most of their attention on the investment foreign investors, the pace of the legisla-
tive process with frequent omission of the
key commercial elements.
On the other hand, market players land market phase of consulting new solutions with
the market, quick implementation of new
face many challenges. In most cases,
these challenges are complex and relate in 2019 focused regulations (without providing sufficient
time to prepare for their implementation
to business and legal aspects. The most
important of them are currently low sup- mainly on the by the interested parties), and the lack of
sensitivity and disregard for the global
residential
ply of investment land and increasingly perspective of the commercial real estate
difficult access to qualified personnel market are definitely drawbacks to be ad-
sector, all
in the construction industry. Although dressed.
the investment land market in 2019 fo- It is difficult to clearly assess the activ-
cused mainly on the residential sector, ities of the legislator in improving the
all sectors have experienced difficulties
in accessing attractive land. Therefore,
sectors have legal environment of the commercial real
estate market. We have some positive
regulations concerning the broadly un-
derstood investment and construction
experienced experiences, such as elimination of the
significance of perpetual usufruct and
process in Poland, in particular regula-
tions concerning spatial planning, turn
difficulties simplification of administrative proceed-
ings, as well as some flexibility in trad-
out to be a significant obstacle. They are
not transparent and are characterized
in accessing ing in agricultural real estate (after their
practical exclusion from legal circula-
by a high level of complexity. One-off
solutions which are thematically limited,
attractive land” tion). The simplification and stabilization
of the construction process, which was
such as the so-called Lex Developer Act, carried out in Parliament, should also
also turn out to be ineffective. Appropri- be assessed positively. However, it seems
ate legal regulations must reflect the solu- process, which often requires changes in that more can be achieved here, among
tions developed by all stakeholders. Nev- plans. Preparation of such land may take others, at the level of statutory solutions
ertheless, investors are ready to purchase years, but in the current conditions it is or in the case of a layered real estate insti-
land, which requires e.g. liquidation of often the only way to secure the desired tution, commonly referred to as a 3D plot.
existing industrial activity or provision locations. Attempts to introduce this institution,
of appropriate infrastructure before the Another problem is the complexity and which successfully operates in France,
investment starts. Although in this case instability of the tax system. The delay in Germany or Great Britain in various legal
the truth is that they have to be prepared the regulation of the Polish REIT equiva- variants, have been made for a long time,
for an expensive and long administrative lent, as well as the low stability of direct but with no result.
FOT. SHUTTERSTOCKWAREHOUSE MARKET
READY FOR THE UPCOMING
FRUITFUL YEARS
Comment by Beata Hryniewska, Senior Director, Head of Industrial & Logistics at CBRE Poland
O
ver the last few years the ware- try, as well as courier distribution centers,
house space in Poland has which are located near large cities and are
doubled. crucial for so-called last mile logistics. Po-
Already in 2014 we had 8.5 land is constantly developing in the area of
million square meters of warehouse space, online shopping. The percentage of such
and at the end of 2019 this space increased consumers is clearly growing from year
to about 18.4 million square meters. It to year. According to Gemius data, in mid-
is important that tenants can finally feel 2019 62% of consumers were shopping
relief – thanks to more and more frequent online. For comparison, the year before
Beata Hryniewska
speculative projects, the problem of lack was 56%, and in 2017 – 54%. Therefore, the
Senior Director, Head of Industrial &
of immediately available warehouses has warehouse and logistics market is devel-
Logistics at CBRE Poland
also decreased, which is particularly im- oping dynamically.
portant for retail chains and logistics com- The industry is aware of the challenges
panies. Both demand and supply are deve- ahead and is prepared to face them. The
loping equally. most important factors for logistics com- There is an optimistic approach to the
Theprevioustwoyearswereexceptional panies related to the industry are to in- future of the industry – half of our cus-
for the whole industry due to several very crease the number of employees – if neces- tomers expect an increase in demand for
spectacular transactions for companies sary – and to cope with wage pressure, as warehouse space in 2020. Developers are
such as Amazon, Zalando or Leroy Merlin, well as the introduction of technological constantly carrying out speculative con-
influencing the current shape of the mar- improvements and the so-called win- structions that reflect tenant demand,
ket, which is growing steadily again. dows with extended implementation time which confirms the positive forecasts
The growing e-commerce market con- – principles of cooperation for contrac- for the future. The country’s economic
tinues to play a very important role in the tors, including, among others, appropri- growth, as well as the development of the
development of this industry. In 2019, ate reporting of transports. Although the road infrastructure, which is a key factor
the value of e-commerce transactions positive dynamics of logistics still persists, for the industry, attracts investors who are
remained at a level similar to previous companies are aware of the risks associ- aware of the market’s potential and closely
years and amounted to about 10% of total ated with the economic slowdown, which observe all projects under construction.
demand. Large logistics centres are being affects some of the neighbouring coun- One of the most expected trends for
established in various strategic commu- tries and are ready to counteract its nega- 2020 is the implementation of projects
nication locations throughout the coun- tive effects in Poland. related to environmental protection in
business activities. This applies both to
developers building new, environmentally
“Although the positive dynamics friendly buildings and applying ecological
solutions, as well as logistics operators or
of logistics still persists, manufacturing and commercial compa-
nies that declare to create environment-
companies are aware of the risks ally friendly supply chains. We can only
keep our fingers crossed and hope that sus-
associated with the economic tainable development in the years to come
will be permanently embedded in the
slowdown” strategies of companies involved in logis-
tics.
26NEW REQUIREMENTS
FOR WAREHOUSE MARKET
TENANTS
Comment by Katarzyna Pyś-Fabiańczyk, Director Leasing & Development CEE
at Exeter Property Group, Business Coach certified by PWC/ACSTH; President of Ladies First
T
he warehouse market in Po- On the other hand, logistics and manufac- Another important trend affecting the
land is undergoing changes turing companies train their employees warehouse market is constantly chang-
which are evolving in one dire- to prepare them for future cooperation ing specificity of activities occurring in
ction – high tech and imple- with robots. a given facility. Few years ago, some of
mentation of modern solutions. Proper the key factors influencing warehouse
technical standard of facilities and loca- location were favourable traffic connec-
tion in the proximity of the highway are tions with suppliers and key markets, easy
no longer the only factors that influence access, proximity to harbours, trains and
the decisions of potential tenants. Cur- airports. However, new tenants have addi-
rently – new technologies and sustainable tional requirements.
solutions are becoming increasingly im- First of all, one of the most important
portant. The main market participants site selection factors is becoming availa-
organize specialized seminars and con- bility of skilled labour. What matters now
Katarzyna Pyś-Fabiańczyk
ferences, during which issues related to is not only the strategic location in rela-
Director Leasing & Development CEE at Exeter
the development of new technologies and tion to motorways, airports, seaports or
Property Group, Business Coach certified
automation processes and their impact railways, but also the proximity of bus
by PWC/ACSTH; President of Ladies First
on the real estate market are discussed. stops, spacious car parks, bicycle winds,
FOT. SHUTTERSTOCK
28TIME FOR POLSKA
FOT. SHUTTERSTOCK
“The e-commerce industry
i.e. facilities for future employees. Ten-
ants are often willing to pay more to adapt
all technical standards to the specifics of
their business and to provide comfort- continues to be a strong stimulator
able working environment. Adequate day
lighting, heating and ventilation systems of market development”
and the necessary social facilities are
essential for logistics companies whose
employees operate picking lines. The im- dustry, but also car manufacturers, food, the largest international market play-
plementation of automation processes pharmaceutical and clothing companies ers to locate their main logistics centers
is also a particular challenge. More and and many other industries. here. More and more attention is paid to
more companies first design production The e-commerce industry continues to the so called Western Wall, i.e. cities loca-
lines, mezzanine and other technological be a strong stimulator of market develo- ted along the western border, such as
solutions and then adapt the building to pment. The Polish market guarantees the Sulechów, Świebodzin, Słubice and
their business. The development of new availability of large, well-prepared areas Szczecin, due to the road and cargo con-
technologies concerns not only the IT in- covered by the zoning plan, which allows nection with the German market. Among
tenants there are not only European firms,
but also Asian companies, which are de-
“One of the most important site
veloping very dynamically. In the coming
months, the Polish warehouse real estate
selection factors is becoming
market will see further progress in terms
of supply and demand, and the progress
of e-commerce and new technologies will
availability of skilled labour” stimulate its development.
29NOWHERE NEAR THE END
– THE OFFICE MARKET
IN POLAND IS BOOMING
Comment by Mikołaj Sznajder, Director, Head of A&T Office at CBRE Poland
T
he situation on the Polish of- of companies fighting for employees on
fice market looks more and the market, this is key information. It is
more interesting every year. a natural fact that many companies see
As soon as experts assess the skills of their employees as a major
that the market is coming to an end, it factor in the further development of
surprises them with great results in the their business. Companies mostly care
context of new investments, tenants’ re- about qualified employees with specific
quirements and investors’ interest. skills necessary in their businesses.
At present, a total of 11 million square This is one of the reasons why em-
meters of office space is available in Po- ployers are increasingly focusing their Mikołaj Sznajder
land, which is divided almost in half attention on artificial intelligence and Director, Head of A&T Office
between Warsaw and other regional new technologies that allow them to at CBRE Poland
cities such as Krakow, Wroclaw, Lodz stand out from the labour market. More
and Gdansk. Another 900,000 square and more companies want to invest in
meters of office space will enter the mar- modern solutions on their space, which
ket in 2020, of which 400,000 square increase the comfort of work, they also amount of time while working, which
meters will be available in Warsaw and expect the same from the buildings in of course requires appropriate fur-
the remainder in other regional cities. which they will work. niture. Workplace personalization also
New business districts are appearing on includes access to different communi-
the country’s map, attracting tenants’ cation channels, services, facilities, loca-
attention. Importantly, high supply
is accompanied by high demand. “More and more tions, such as the proximity of friends
or the ability to transfer access to
companies
The vacancy rate has also fallen. a parking space via a mobile phone. One
In 2019 in Warsaw it was about 7.8%, of the most interesting added values of
want to invest
while in other regional cities it ranged technology is the so-called way finding,
from 5% in Gdansk to just over 10% in i.e. the possibility of finding available
in modern
Krakow. There are no problems with conference rooms or services.
renting new space in very well-connec- In conclusion, the prospects for the
ted locations, which compete to bring in office market in Poland are painted in
tenants not only with price, but above
all with quality, which is becoming in-
solutions very bright colors. In 2019, investors
in office projects accounted for almost
creasingly important for tenants and
their employees.
on their space” 50% of the volume of transactions on
the market. Developers are still very
The office – mainly its location – is active in finding new land and imple-
becoming increasingly valuable for menting new projects. Tenants, both
employees. Our research shows that as The most important elements, which those present in Poland and those
many as two thirds of employees would will be individually designed in offices developing their business, as well as
be willing to accept a less paid job, but by new technologies, are temperature, those just starting up, are tempted by
in a better and more comfortable place. type of lighting – its power and colour. good location conditions and consider-
The closer to public transport, the bet- Moreover, companies can provide some able human capital, which allow them
ter. Already half of the respondents employees with the opportunity to to believe that there are many very suc-
want to spend up to 20 minutes com- design their workplace. For example, cessful years ahead of the Polish office
muting to work. From the perspective some people like to stand for a certain market.
30TIME FOR POLSKA
THREE POINTS AROUND 2019
POLISH COMMERCIAL REAL
ESTATE MARKET
Comment by Konrad Płochocki,
General Director of Polish Association of Developers (PZFD) / Board Member of ULI Poland
1. With a trading market turnover of around EUR 7.7
billion, Poland accounts for more than 50% of all CEE
transactions.
2. Poland’s promotion to the group of developed
markets in the FTSE Russell ranking (as early as
in 2018) is bearing fruit, attracting the interest of
completely new groups of investors from Asia or the
USA, although numerous capital investments from
regional countries neighbouring Poland, especially
the Czech Republic, were a surprise.
3. The sale of the student house chain and several hotel Konrad Płochocki
General Director of Polish Association
transactions confirm that the retail sector is no longer of Developers (PZFD) / Board Member
limited to the office, retail and logistics sectors. of ULI Poland
T
he Polish commercial real es- self in teamwork, while the combination Poland has the willingness and am-
tate market has developed of apartment and dormitory results in a bition to fight to maintain and acquire
strongly and is now appro- collision. Cafes begin to compete with of- the best business talent by becoming
aching the first league of fice space, and production technologies a start-up centre based on Western
European markets. According to JLL’s based on 3D printing make the opening European capitals. Creating an equal
data, turnover in the office market of a factory in a neighboring apartment race with the largest cities in Europe
reached EUR 3.83 billion, EUR 2 billion in a reality that is happening before our can be an opportunity for further mar-
trade, nearly EUR 1.5 billion in logistics, eyes. We can be sure that new “mixes” ket development.
EUR 280 million in hotels and EUR 137 will surprise us in the near future.
million in the residential sector.
In the development sector we are wit-
nessing a transformation of the whole
market towards mixed use. We are also
“In the development sector we
beginning to design flexible structures
that will be able to change their purpose
are witnessing a transformation
quickly over the years. Evolving user
expectations are unpredictable, but the of the whole market towards
need for change is predicted. The com-
bination of office and home manifests it- mixed use”
311. 2019 was the second THREE POINTS ABOUT
best year in history
after 1989, when
the developer sold RESIDENTIAL REAL
about 110,000
apartments
nationwide. ESTATE MARKET
2. A deep interest
in the acquisition Comment by Konrad Płochocki,
of development General Director of Polish Association of Developers (PZFD) /
groups by foreign Board Member of ULI Poland
investors is visible.
T
The takeover
he previous year was the cooperation in exchange for access to
of Echo, the largest second best year in the history attractive state land.
Polish developer of the development market.
operating Only the record results of 2017 Expectation for 2020
remain unbeatable. According to JLL’s Forecasts for 2020 are good. All market
in various sectors, calculations, developers in the six largest sectors should grow steadily, although
by the Hungarian markets sold over 65,000 apartments. probably at a slightly slower pace than
wing for approx. This result turned out to be better for before. Business is doing well and all we
almost 5,000 units than that achieved in may want is for political disagreements
EUR 200 million, 2018. Across the country, it can be estim- to resolve.
the purchase ated that approximately 110,000 units
of Vantage were sold in 2019 compared to 105,000
units in 2018.
Development by the
German residential
The industry was also struggling
with the lack of suitable land (espe-
“2019 was the
market giant Tag cially those covered by zoning plans or
building permits) and constantly rising
second best
Immobilien for rent
or the acquisition
construction costs (prices increased by
up to 30% since 2017). Problems with
year in the
of the majority obtaining official decisions necessary
to start the investment resulted in a
history of the
of shares in Polnord
by Hungarian
total decrease in the number of offered
apartments. As a result, the prices of the
development
Cordia are apartments increased drastically. We
are talking about an average increase
market”
signs of foreign of over 10%, the highest was recorded in
investors’ interest Cracow (16% increase) and the lowest in
in developers Poznań (about 2%).
At the end of 2019, the Ministry of
operating Development resumed dialogue with
in Poland. industry representatives and began to
explore the possibilities of involving
3. Crazy increase the private sector in the construction
in apartment prices, of apartments with reduced rent un-
der the government’s “Flat Plus” pro-
which exceeded gramme, as well as try to identify barri-
10%, did not stop ers in the investment and construction Konrad Płochocki
process. The Polish Association of De- General Director of Polish Association
the volume of Developers (PZFD) / Board Member
velopers submitted a relevant report
of transactions. to the Ministry. The industry counts on of ULI Poland
32TIME FOR POLSKA
10-13 MARCH 2020
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33BUSY YEAR
AND ACCELERATION
IN THE PRS SEGMENT
Comment by Maximilian Mendel, Head of Residential Investment at JLL
I
n 2019, the Polish housing market Tenements have their own specific idents, located at Nowy Świat Street. The
experienced an acceleration and character and are quite unique – espe- investor promised to deliver premium
increase of projects in the rental cially in Warsaw, where very few of class rental apartments in the building
and private student housing sec- them survived World War II. There is previously owned by Warszawskie Przed-
tors. Our country is still on the radar of certainly no shortage of people willing siębiorstwo Geodezyjne (The Warsaw
large foreign investors and some of them to live in a renovated and modernised Surveying Company).
have been able to conclude spectacular building with history. Adapting such
deals. Although potential institutional properties to the needs of the rental mar- Down the beaten developer track
buyers are still unable to purchase turn- ket can also be considered as restoring A completely different strategy was
key portfolios on an expected scale, and them to their original function. Many of adopted by the German investor TAG
entering the market mostly means build- them were constructed for private entre- Immobilien. Their acquisition of the
ing new stock, the institutional rental preneurs or institutions (including ZUS leading Wrocław developer Vantage De-
sector is drawing more and more in- – Social Insurance Institution) as rental velopment for approx. PLN 365 million
terest and will undoubtedly be a desired buil-dings. (EUR 85 million) this November caused
category of safe assets in 2020. The Israeli company AFI Europe chose a major sensation on the Polish market.
Poland is still an immature, though a similar path of operations in Poland. The investor intends to build 10,000
extremely attractive market for entities This spring, the investor began revitalisa- rental units within a short period of time,
focused on investing in the institutional tion works on the Wolf Krongold historic mostly in Wrocław.
rental sector. Although entering our mar- tenement, commonly referred to as «Pe- Major foreign entities have been ob-
ket entails greater risk, this risk is offset kin» (Polish for “Beijing”), located at the serving the Polish market for a long time,
by a higher capitalisation rate. While ROIs intersection of Złota and Żelazna Streets. but the problem a lack of product. Most
of 6-8% are impossible to achieve in West- The company purchased the property in developers are not very willing to build
ern Europe, they are still attainable for 2015 for PLN 21 million and plans to build for institutional investors, because retail
investors in Poland. The growing interest around 160 units there. sales still give them better margins. The
in renting among the younger generation A much higher price of PLN 60 mil- purchase of a development company with
and the consistent rise of rental rates (they lion had to be paid for the Natanson tene- a large portfolio of building plots and pro-
have increased by nearly 25% since 2014) ment, nicknamed «Rolex» by Warsaw res- jects in the pipeline allows to shorten the
seem to be enough to attract more players.
“The Polish market is one of the most
Old in a new way
2019 was an intensive year for the Czech in-
attractive in Europe in terms of
vestor Zeitgeist Asset Management. In mid-
2019, they signed a contract for the pur-
return on investment. Over the past
chase of a historic building of the Main Post
Office in Kraków at Wielopole 2, as well
five years, more than PLN 3 billion
as a magnificent plot with existing build-
ings at Cystersów 21. The same holds true
has been invested in this sector, and
for the 1-hectare plot at the intersection
of Nowogrodzka and Św. Barbary Streets
we should remember that this sector
in the Warsaw›s district of Śródmieście,
which was bought by Zeitgeist AM from Or-
did not exist at all five years ago”
ange Polska for an impressive sum of PLN
350 million (EUR 81 million).
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