The land of the Holy Cross

An increasing number of both domestic and foreign investors are interested in the Kielce region. Its unique feature is that Świętokrzyskie province, of which it is part, is the only one in Poland which is not in debt

A few years ago, during a reform of the country’s administrative boundaries, there was a debate over whether there was any sense in keeping Świętokrzyskie as a separate province – one of Poland’s poorest and least developed regions. Today the region is rapidly making up for lost time compared to other areas of Poland.

Cottage on the outskirts

As with the rest of Poland, Kielce clearly going through a housing boom, with demand greatly exceeding supply. When new homes come onto the market around 80 pct are bought from developers in a matter of days. And prices are spiralling – a square metre in a new building costing between PLN 2,800 and 3,500. Around 51,000 sqm of residential space was delivered last year, but this can hardly satisfy the needs of Kielce’s citizens. Investors believe that there would be more houses if only it was easier to obtain building permits. The land in the city centre of most interest to investors is also the most problematic, so Kielce is now expanding from its outskirts. Though developers may wince at such locations, the number of homes developed by building cooperatives on the city’s edges is gradually increasing. Low-rise buildings containing around a dozen homes at the most, generate the greatest interest from buyers, as well as those in the city centre. The difference in prices for flats in the centre from those in the more distant outskirts is around 20 pct – small compared to similar cities.

Office ellipse

Office space in Kielce is mostly developed for renting. The square metre price varies between PLN 35 and 150, the most expensive being for ‘A’ class premises (according to PAIiIZ’s classification). Around 35,000 sqm of office space is planned for delivery next year. Usually 3- or 4-storey buildings are erected, e.g. the Relax Centre on ul. Klonowa and the Becher building on ul. Św. Leonarda. But there are exceptions, e.g. the Business Centre built by Exbud in 1991. The construction of an office park on al. Solidarności is getting off the ground, where four 6-storey buildings will appear. The first tenants, including Ceresanit and Echo Investment, will move in in the third quarter of 2007. The next tall office building will house the head office of the Kolporter press distribution group. It is designed as an ellipse-shaped high-rise building of 11 storeys and 5,000 sqm office space, to be opened in April 2007.

Shopping on the outskirts

As in other cities, large-scale shopping facilities are concentrated outside the city centre. Echo Investment is the most dynamic Kielce developer building shopping complexes. It opened its first centre – the Galeria Echo – in 2002, constructed by Polimex Mostostal and the largest shopping and entertainment complex in the region. The centre on ul. Świętokrzyska, with space of around 58,000 sqm, contains almost 80 outlets, a 3,000 sqm seven-screen multiplex, catering points and even a children’s playground – all under one roof. Echo is now developing another shopping centre, the Pasaż Świetokrzyski, again together with Polimex. The first section is to open for business at the beginning of November this year. The centre has rentable space of around 13,000 sqm and will house a hypermarket as well as a gallery with 40 outlets. The principal tenants will include E. Leclerc, RTV Euro AGD, CCC, House, Active, Vision Express, Monnari, 4You, Tatuum, Quiosque and Bergson. Apart from Echo’s standard investments on the Kielce market, the Tesco, Real, Macro, Geant, Biedronka and Castorama chains also have branches operating in the city. Mirosław Głowacki of developers Becher remarks that: “The shopping and services market is already saturated with large shopping space outlets, the majority of smaller outlets having shifted to them from the city centre.”

But investments in this area do not stop here. The latest project is a shopping mall in Kielce city centre on ul. Warszawska by Church Land Development – a Dutch investor. The building will have an area of more than 35,000 sqm, with 100 trade outlets, and will also feature a water cascade and a display of illuminated tubes. Apart from outlets, cafes and restaurants, the mall will also house the city’s second multiplex cinema, a bowling alley and a climbing wall. This investment may attract shops away from the outskirts to the city centre.

The magnet called Kielce

Kielce, the capital of the province, is a powerful attraction to investors. The Targi Kielce, second only to that of Poznań, has been held since 1993, but its share of the Polish exhibition market amounts to a mere 17 pct. A three-star hotel will soon be added to the 140,000 sqm of space provided by the existing buildings, as well as car parks and, most importantly, new exhibition halls. For this the Targi Kielce is counting on a financial injection from the EU of as much as PLN 130 mln. The whole city is to expand to accommodate the Fair. Efforts are underway to set up a specialist group known as Fairs, Congresses, Conferences and Accompanying Services, comprising companies which want to improve the city’s and the region’s image, expand services and generate closer contacts for cooperation with the many companies in the area.

Wot no sheds?

The greatest drawback for the Kielce property market is warehouse space. There is practically nothing going on as regards development in this sector. Some warehouses are situated alongside large businesses, e.g. Chmar, where the space is available for rent. Two new investments of this kind are envisaged in the planned industrial zone (near the Browar Belgia brewery). Several other small warehouses are to appear in the “Lotus” Business Park. Only three such building permits were granted in 2005 for app. 1,400 sqm of warehousing space, while the first half of 2006 saw 6 permits issued allowing another 2,570 sqm. The rent for warehouse space in Kielce is between PLN 5 and 10 per sqm. According Kielce council, 600 sqm of free warehouse space is available in the city. The largest warehouses are the property of the Targi Kielce and, for the moment, are sublet to such large companies as Coca-Cola. The Trade Fair has  maintenance work carried out every year both for their own needs and for leasing.

Your new address

New investments appear every year which means that Kielce is attracting capital, resulting in the continuous development of the region and a narrowing of the gap with the main Polish cities. Due to this, several steadily growing international concerns and shopping chains have settled in Kielce offering an increasing number of new jobs. Targi Kielce owes its boom to the hotel industry which does not experience seasonal fluctuations so greatly. This recently investment-neglected city now has the opportunity to become a real regional capital, which is worth visiting but also where good business can be done.

        z Zuzanna Wiak