The Viking has landed

Reinhold are soon to complete investing a PLN 150 mln fund in Polish real estate.

A look at what the Swedish developer has spent it on so far and what they might do next

Reinhold’s history of involvement in Poland goes back to 2005, when the first scouts were sent here – a mission undertaken by a Polish contractor working for Reinhold in Sweden. The company actually started operating in Poland in February 2006, initially using Regus’ Silesian office to conduct research into the Polish market. Reinhold now has 3 divisions operating in Poland: Reinhold Polska (development), the Reinhold Group (investment) and Reinhold Lifestyle (fitness centres). The total number of staff is at the moment relatively small, with all 3 divisions employing around 20 people in total, but according to the company’s investment manager Piotr Jaśkowski, “we will have 80 people by the summer, and apart from our Warsaw office, we have now opened offices in Kraków, Katowice (south Poland head office), Wrocław and Poznań.”

 Get yourselves into some serious debt

 The biggest factor for Reinhold is the Polish economy, with around a 5 pct increase in GDP every year, as well as the inexpensive credit on offer. “Potential home-buyers are being attacked by banks on every corner,” says Piotr Jaśkowski, Reinhold Polska’s investment manager. The number of mortgages taken out so far in Poland is still very low, with the amount of debt in Poland standing at around 9 pct of the GDP, compared to the 60 pct that is usual in western countries. In the last 2 years the amount of debt has increased to around PLN 70 bln, but it would take another PLN 600 bln to reach western levels, and this is why Reinhold remains confident that there are likely to be many more people taking out mortgages in the years to come.

Despite their confidence in this sector, Reinhold’s residential activities only make up between around 20 pct of their business, with office development taking up most of it (app. 60 pct) and retail the remainder. However, Mr Jaśkowski claims that “later we are looking to make residential developments the majority of our business.” As for the group’s plans in these sectors, he reveals that: “In retail we are looking for more opportunities, but there is a lot of competition, with developers currently in a race to grab the best land in smaller cities. We ourselves are looking at several plots, but we haven’t bought anything yet.  We are also looking to move into logistics.” He characterizes Reinhold’s ambitions thusly: “We want to be a major developer on the Polish market and considered as a Polish company acting locally with regional offices, building Reinhold into a well-known brand operating in the logistics, retail, office and residential sectors.”

Desperately seeking specialists

 Last September, the group raised SEK 315 mln (app. PLN 150 mln) in equity for Polish investments, with the aim of having this fully invested by May. Reinhold’s acquisitions so far include (for an undisclosed sum) al. Jerozolimskie Nathan North