PL

Developer profits still rocketing

The aggregate net profit of the 30 largest commercial property developers in Poland hit an all-time high of PLN 985 mln (EUR 230 mln) in 2018, which translated into a net profit margin of 25 pct. The latest data from the investment transaction market and property developers’ interim financial statements suggest that 2019 could be as good a year as 2018 was for the industry in terms of profitability. The aggregate net profit margin of the 30 leading office, retail and warehouse developers operating in Poland ranged between 17 pct and 26 pct from 2012 to 2018, which represents an average annual margin of 21 pct.

One major factor is the solid volume of property investment transactions in Poland, which has been consistently high in recent years and has had a stabilising effect on commercial property developers’ hefty profit margins. The property investment transaction volume topped the PLN 30 bln-mark (EUR 7 bln) for the first time on record in 2018. What is important is that as well as office and retail properties, investment transactions increasingly involve warehouse buildings, which currently have the highest yields. And the developers of warehouse properties turned out to be the biggest contributors to the record-high profits reported by the 30 largest commercial developers in Poland in 2018.

The fact that commercial developers show high and stable profitability is encouraging some residential property developers to venture our into new business areas. For instance, Atal is building its first office building, Krakowska 35, in Wroclaw. The company decided to develop commercial to optimally use its land bank, and considers them to be an additional activity to its core business of residential development. For similar reasons, and also in Wroclaw, i2 Development has launched a mixed-use project. Armii Krajowej 7 is one of the developer’s largest projects ever. The centre will consist of hotel rooms, business premises, office space and apartments.

Finnish-based YIT, which used to focus on the Warsaw residential market, also intends to launch its first Polish mixed-use project. The company has a successful track-record of commercial projects in other countries, and now plans to expand throughout Poland. YIT’s first mixed-use project will be based in Gdańsk. The developer intends to create sustainable urban environments which also feature office space.


Latest comments

The effect of the US elections on the global real estate market

The effect of the US elections on the global real estate market

schedule 01 December 2020

The geopolitical diversity of the EMEA region means that there are multiple economic and business permutations to consider in light of a new first term for President Biden and the ...

Damian Harrington,
Colliers International

Is COVID-19 ecommerce’s tipping point?

Is COVID-19 ecommerce’s tipping point?

schedule 04 August 2020

The imminent demise of traditional retail has been predicted many times over the past decade, with online shopping and ecommerce giants being the prime suspects in its murder. Sinc ...

Sean Culey, a futurist, business transformation expert
P3 Logistic Parks

Regional Office Markets in the Coronavirus Era

Regional Office Markets in the Coronavirus Era

schedule 13 May 2020

The Covid-19 pandemic has resulted in a global economic slowdown, which the property market is naturally not immune to. Individual segments of this market have responded to the cur ...

Marta Wybrańska, leasing director
Avestus Real Estate

The industrial sector - one of the most resilient in this crisis

The industrial sector - one of the most resilient in this crisis

schedule 08 April 2020

The Covid-19 pandemic has definitely forced more people online and buyers who may not have shopped online previously could now become accustomed to having goods delivered directly ...

John Palmer, The head of industrial investment
Savills

Pandemic: Threats and opportunities for the economy

Pandemic: Threats and opportunities for the economy

schedule 24 March 2020

In the face of the fight with coronavirus, it is easy to become pessimistic because difficult times lie ahead for the Polish and global economy. Stock exchanges both overseas and i ...

Marcin Rudziński,
Higasa Properties

How the coronavirus crisis will affect EMEA markets

How the coronavirus crisis will affect EMEA markets

schedule 23 March 2020

It is difficult to estimate the final impact of the coronavirus on the real estate market in the EMEA region at this point in time, but the tourism, trade and leisure industries ar ...

Monika Rajska-Wolińska, managing partner
Colliers International

An overview of the Warehouse sector for 2019

An overview of the Warehouse sector for 2019

schedule 09 March 2020

In 2019, the investment transaction volume for the warehouse sector came to EUR 1.48 bln, 17 pct lower than the record set in 2018. It was lower because a number of negotiations we ...

Anna Głowacz, Head of industrial
Axi Immo

Sustainable development changes our thinking about buildings

Sustainable development changes our thinking about buildings

schedule 24 February 2020

I can see two main trends. The first, in an era when data is everything, will be greater efficiency in generating and collating the data for a building or office, thus leading to b ...

Arkadiusz Rudzki, executive vice-president for leasing and sales
Skanska

Customers expect ever faster deliveries

Customers expect ever faster deliveries

schedule 10 January 2020

We are very pleased that the warehouse sector ended 2019 on a big plus on both the demand and supply side, but it does not give us a chance to rest but rather pushes us to further ...

Lukáš Répal, chief operating officer
Accolade

A golden age for retail parks

A golden age for retail parks

schedule 04 December 2019

The end of the year and the run-up to Christmas is an intense period for the retail market. However, in terms of large shopping centres there’s no room for further investment ...

Jacek Wesołowski, the managing director
Trei Real Estate Polska

The best period in history

The best period in history

schedule 02 December 2019

Warsaw’s office investment market is experiencing its best period in history. At the end of Q3 2019, the total investment volume in the capital city amounted to EUR 1.71bn, v ...

Soren Rodian Olsen, Partner, Head of Capital Markets Poland at Cushman & Wakefield
Cushman & Wakefield

Developer profits still rocketing

Developer profits still rocketing

schedule 19 November 2019

The aggregate net profit of the 30 largest commercial property developers in Poland hit an all-time high of PLN 985 mln (EUR 230 mln) in 2018, which translated into a net profit ma ...

Bartłomiej Sosna,
Spectis

Categories