Pouring petrol on the flames

This attractive Mazovian city is proving very tempting to investors, with shopping centre developers first off the mark on the local real estate market, competing for the custom of the prosperous wives of workers at the nearby petrol refinery. The housing fever in other cities is already taking hold in Płock

Not a lot of people know this, but Płock houses Poland’s oldest museum and cemetery. However, it is widely known that the PKN Orlen petrol company – one of Poland’s largest firms – also has its headquarters in Płock. Although the city was deprived of its prestigious administrative position in 1998 when Płock province was incorporated into Mazovia, it still continues to be a strategic centre due to the huge influence that Orlen exerts on the economy and life of the region’s citizens. Though Płock’s traditions go back to the 10th century, it is not a large city, with is current population standing at less than 130,000. The main part of the city is on the right bank of the Vistula river; Radziwie – the left-bank district of Płock – was only included as part of the city as late as 1923.

Fat wallets
Agnieszka Michalczewska, the head of the retail department at King Sturge, claims that: “With an average per capita income above PLN 3,000, many investments and an enormous number of luxury cars on its streets, Płock is an enviable exception amongst other Polish cities of a similar size.” Retail developers were the first to sense the direction of growth. Today, the wives of Orlen workers, together with their bulging purses, still have to travel to Warsaw to do their bigger shopping. But the need for these excursions will soon come to an end.
Two shopping centres
– apart from the Tesco, Lidl and Netto supermarkets already on the scene – have opened in Płock. Auchan is one of these two malls (Podolszyce district, ul. Wyszogrodzka, tenants: OBI, CCC, Empik), while the other is Galeria Echo (11,000 sqm GLA, tenants: Champion, Nomi, Deichmann, RTV Euro AGD, Top Secret, Adidas), which was developed by Echo Investment of Kielce, before being taken over by the Austrian company Meinl European Land. Płock shoppers had been used to visiting the oldish (built in the 1990s) Tayger shopping centre owned by Marek Bujalski, a local businessman (around 8,000 sqm of leasable space). The building is currently undergoing repairs following the fire which gutted the building last autumn.

Polimeni no longer ahead
Until recently it seemed Vincent Polimeni of Polimeni International in New York would lead the field in the modern shopping centres market, carving up for itself most of the available profits on the way. The developer won an urban competition away back in 2005 to develop the quarter between ul. Jachowicza, Nowy Rynek and ul. Królewiecka (in the city centre), but the development of the Galeria Płock mall (27,000 sqm GLA) has encountered strong opposition both from city officials and local traders.
Monika Łukawska of Polimeni International’s marketing department explains: “We are still waiting for the project’s development conditions to be issued, so we prefer not to announce when construction will start. At the moment we are commercializing the property.”
The Irish Caelum Development company, which took over the Galeria Wisła project from Grupa Zasada, has now moved into the leader’s position in this race. The developer has already received a building permit for a shopping centre in the Podolszyce district at the intersection of ul. Wyszogrodzka and ul. Jana Pawła II (near the OBI and Auchan hypermarkets). The Galeria Wisła mall will have
a total area of more than 54,000 sqm (23,600 sqm rentable space). More than 120 retailers will be housed on the two shopping storeys, and there is a third – mainly reserved for entertainment. Tenants have already been found for 42 pct of the space, including Piotr i Paweł, RTV Euro AGD, New Yorker, Galeria Centrum, Douglas, Monnari, Rossmann, Bata and CCC. The centre is also to house a 5-screen multiplex. The opening of the whole complex is planned for August 2008.
Grzegorz Mroczek, head of Caelum Development Lease Department, reveals that: “We are just deciding on the general contractor and will start work before May is out. It is clear that both the city and our project are well regarded by tenants, both those within chains and those operating on the local market. The stabilized, commercial character of the occupied space has thus been approved.” In his opinion the city is rapidly growing and investing (e.g. the recently renovated city centre promenade – ul. Tumska – and the bridge that has been built), has the highest percentage of registered cars and lies fourth as regards per capita disposable wages, the result being much less migration away from the city for higher earnings.

Austrian company makes Magnolia growth possible
The third project designed to empty the wallets of Płock residents is the Galeria Magnolia mall, to be built at the intersection of ul. Bielska, ul. Tysiąclecia and ul. Przemysłowa (opposite Galeria Echo with its Champion supermarket). The investor is Meinl European Land Group of Austria, the developer is Agromex Development 1, while the project is being drawn up by Budoplan architects of Płock.
Agnieszka Michalczewska of King Sturge, who is dealing with the commercialization of the mall, believes that: “The city has room for two modern, medium-sized shopping centres, the more so that they are to be situated in two opposite sides of the city. And that is why we are not scared of the competition.”
There are to be around 100 retail outlets in the two-storey mall with a rentable space of around 19,000 sqm, a multi–screen cinema, food court and a car park for 800 vehicles. The city office has already issued a positive environmental decision for the project, so the investor expects to receive a building permit in the next few weeks.
Płock’s citizens are to be guaranteed entertainment by the Max-Film institution, which has demolished the old Przedwiośnie cinema and is to develop a multiplex in its place. A tender will be held to find a contractor for this project, with work to start in August 2007 and finishing in May 2008. The 4-screen Nove Przedwiośnie, with a restaurant, café and Gymnasion fitness club, will be open to film buffs in the very heart of the city on ul. Tumska. Nearby, private investors intend to develop the Galeria Tumska mall in the old Hortex building (around 2,000 sqm).
A building permit for this has yet to be granted.

Your own home – but at a price
The construction boom has not pushed the housing market to the sidelines. As in other Polish cities, queues are forming at the doors of developers and housing cooperatives. The demand for a flat of one’s own substantially exceeds the supply. The most popular district is Podolszyce (called “Płock Ursynów”), with the Łukasiewicza, Dobrzyńska and Kolegialna estates a step behind Podolszyce in the ranking list of Płock’s largest dormitory. Those hunting for their own flats can also find them in housing cooperatives (for example the Mazowiecka SM, Chemik SM and SM Budowlani), as well as Przedsiębiorstwo Inwestycji Komunalnych and the Amabud company.
Eugeniusz Adamiak, vice president of Amabud, states that: “It will come as no surprise to learn that just as in other cities, new investments are being put on hold down by the lack of building sites, which is the outcome of the non-existence of local spatial development plans. And the demand is enormous. We are presently selling flats which will be delivered in 2008, while those we are finishing this year found purchasers a long time ago. Such a situation is new to us.”
Eugeniusz Adamiak adds that the upsurge in building materials prices (and their frequent absence) is painfully felt; another problem is the complexity of the construction  market. Amabud is presently developing an estate of terraced family houses on ul. Górna on the Wyszogradzka estate, a small apartment block at ul. Armii Krajowej 74 (Podolszyce), and is soon to start work on another block on a neighbouring site.
Eugeniusz Adamiak adds that: “Two-room flats of between 40 and 50 sqm are in the greatest demand, as well as small three-room flats of around 60 sqm. The prices, which started to climb rapidly last autumn, are currently between PLN 3,000 and PLN 3,200 per sqm from our company.”

Second-hand - but dear
The city’s secondary market is also expanding apace. There is huge interest but a lack of offers. Prices, too, are climbing just as on the primary market, from the level they achieved in 2006, of PLN 1,800–2,000 per sqm.
Krzysztof Morze, head of the Agencja Obrotu Nieruchomościami “Centrum”, is of the opinion that: “The hunger for any kind of home – which is now the case on the market – results in everything available both in new construction and old ‘prefabricated panel’ construction being sold off-hand at prices between PLN 3,000 and PLN 4,000 per sqm, and there are no visible signs that price rises will slow down. Płock is a fine housing developers market.”

A lot still lies ahead
At the same times it would seem that office developers will not be doing big business in Płock. Firms looking for office space have much to choose from – both in older buildings and upgraded tenement buildings in the  centre.
According to Krzysztof Morze: “I was able to offer business space in the PKO BP bank building for several months – at practically zero interest. But there are also modern ‘B’ and ‘B+’ class office buildings in the city, though they are the headquarters of specific companies, e.g. Przedsiębiorstwo Eksploatacji Rurociągów Naftowych “Przyjaźń” (PERN).”
A new office building from the latter company was opened with much pomp and circumstance two months ago, at end of March. It is 7 storeys high, with glass elevation and 13,400 sqm of total usable space, 700 sqm of which will be leased to outside companies. The Vectra construction company of Płock was responsible for the 2-years of work.

Not only for the petrochemical industry
The warehouse market is of a local nature. There are several warehouses measuring several thousand sqm, but there is a notable absence of big boxes built by specialist companies. Płock Industrial and Technological Park – a joint venture between the city and Orlen – should be a true mecca for production, logistics, technological and R&D companies. The initial idea for the park, which was given almost 200 hectares was to attract companies from the fuel industry, was to create something of a group of back-up facilities for the Płock refinery. But now investors from practically every industry are welcomed here with open arms. The first stage of the investment – the construction of the infrastructure will be finished this year. The target is that as many as 20,000 people will work in this park, which neighbours the refinery itself.  
Ewa Andrzejewska