Plotting the best investment

One of the most spectacular site-purchase transactions in recent weeks was the sale of the land on which the Wojskowe Zakłady Graficzne printing house stands in Warsaw. Ghelamco of Belgium, the new owner, does not, however, intend to publish any kind of magazine there, but was fighting to take over 5 ha of land occupied by the defunct Browary Warszawskie brewery (around PLN 3,400 per sqm). Neither site is included in a spatial urban development plan, but this doesn’t seem to worry the investors not at all.

2.1 ha site. Anna Krystecka of Ghelamco informs us that: „The initial concept envisages office buildings of around 50,000 sqm space, as well as around 650 apartments.”

The decision taken by this Belgian developer reflects the current market trend for developers which have been specialising in office buildings are taking a much more active look at the housing market. Eliza Klasińska of the CB Richard Ellis agency valuation department reveals that: „Were I a developer who has just bought a site, I think I would build a house on it. The profit an investor generates from the most prestigious housing projects exceeds 50 pct at least, while it amounts to only 20 pct in the case of an office building.”

Planning without plans is nigh impossible

But there is talk of offices being developed on ul. Cicha. The property owner GD&K Group needs little encouragement to design and build boutique-character office buildings. Nowa Kamienica in Kraków and the S.O.F. and M65 Meduza office buildings also in Kraków, ready to be constructed, are proof of that were any needed.

Developers recognize that while office plots may be somewhat less expensive than apartment sites, the market fever seems to be spilling over into housing. But the price of sites is not as important. What is important is the relationship between its price and what can be constructed on it and what rents may later be demanded. Patryk Frąckowiak, a Knight Frank negotiator, comments that: „We always look at rental rates which are always stable, when we evaluate and purchase a plot. We are clearly on an upward trend at present, but I would be wrong to expect rents to rise at the same rate as homes, for instance. Office building proprietors have become less flexible when negotiating for the moment, but there can be no talk of any increases in rents. Returning to the purchase of plots – it is easier now to find land for a small office building in Warsaw’s Mokotów or Ursynów districts, for instance, than for apartments. Competition outside Warsaw, however, among companies searching for plots is much greater. There are much fewer attractive sites in regional cities.”

4.5 ha of undeveloped land near Wrocław Hotel, i.e. PLN 2,700 per sqm. Almost anything will be allowed to be constructed on the site: shopping centres above 2,000 sqm, offices, hotels and apartments. The maximum construction height will be between 20 and The flow of foreign capital into Poland continues unabated, of which much is reaching the office market. Building prices are rising steadily, with some properties changing hands several times over. The compression of capital rates is proceeding, but developers are gleefully forecasting even better times just around the corner.