POLAND Eyal Mor, the managing director of Asbud, claims that his company is very much interested in long term investment in Poland. The Israeli-owned firm entered the Polish market in 1996 to do business and since that time has delivered more than 1,000 apartments to the market in seven projects. After 2007, the company temporarily slowed down its expansion strategy. "We stepped back during the crisis to reassess the market. Since 2007, we've mainly concentrated on design and purchase," Mr Mor explains.
Now in partnership
Now Asbud is reinvesting, with its latest investment being an office project it is co-developing with Ablon on ul. Karolkowa in Warsaw. The project was originally begun by Ablon, with Asbud buying a 50 pct stake in the project last December. "We have launched all the aspects of the project, including the marketing and leasing. On February 15th we restarted the construction work," Say Eyal Mor. The project is to be delivered in June 2014.
The class 'A' office building will offer a total area of over 17,500 sqm with around 14,500 sqm of office space and app. 3,000 sqm earmarked for retail. The project, which is being constructed by general contractor Karmar, is to be BREEAM certified and the developer hopes to attain a grade of at least 'Good'. Karolkowa Business Park is being built on the site of the former Philips lighting factory. The project will retain the plant's old façade, while many of the bricks from the dismantled factory are to be used elsewhere in the project.
Currently the company is in negotiations to finalise the refinancing of the development with one of Poland's leading banks. "We can always build on equity but it's not as economically wise as refinancing, because the latter releases equity for other investments. Additionally, a bank is a partner and provides you with a good standing," Eyal Mor explains.
Building apartments too
Indeed, Karolkowa is not the company's only recent financing deal: Pekao has refinanced the construction work on the second stage of the company's residential estate on ul. Głębocka in Warsaw's Białołęka district.Construction work is underway and a further 198 apartments are set to be delivered in Q3 2014 with an average size of around 50 sqm. He admits the end of the Rodzina na Swoim programme, under which the government once helped young couples to buy their first homes, has "impacted some segments of the market." But the company believes that the introduction of the Mieszkanie dla Młodych programme, which is planned to start up next January, will help to replace the missing demand. When it comes to apartment prices, he pays less attention to the price per sqm - for Eyal Mor, the unit price is far more important. The average Polish worker on an average salary is limited by his mortgage and will only be able to pay around PLN 250,000 for an apartment. This is why Asbud has introduced a promotion that allows home-buyers to purchase a 60 sqm apartment for the price of 50 sqm on its Głębocka estate.
Asbud stresses the importance of considering the economic, social and environmental needs of its clients, so when it plans a new estate it always examines the surrounding services available, such as the number of kindergartens, banks and supermarkets in the area and ensures that they are within walking distance. "We are not trying to make the maximum profit on account of our product," says Mr Mor, "you can't say that we are philanthropists. We are investors who are trying to create a sustainable environment and meeting client needs with a good product in a good investment. This is the brand name."
One more project
He also stresses that Asbud is here to stay: "We are a big believer in the Polish market and we are a long-term investor." He claims that the residential market in Poland is recovering, but he still believes in diversifying investment between residential, retail and office projects. The company is currently applying for a building permit to construct another office project on a site it has owned for some time on ul. Bokserska.
