A tailor-made law firm

‘Eurobuild CEE’: The Eurobuild Awards 2014 statuette for Polish Law Firm of the Year went to CMS, whose skills have been brought to bear in some of the largest transactions in the investment market in Poland and across the region. Is it difficult to build a team of good and successful real estate lawyers?

Wojciech Koczara, partner, CMS: We started building our current team nine years ago, back in 2006. We focused on the most competent individuals, who involved themselves in what they were doing, showing responsibility and a client-orientated attitude. We created a team that operates not only in the real estate market in the strict sense, but also in infrastructure and construction. In our two offices – Warsaw and Poznań – we have a combined team of 30 lawyers dealing exclusively with real
estate. This allows us to maintain a highly focused specialisation without losing sight of the full picture of the overall real estate market.

What cases has your team recently been working on?

Lidia Dziurzyńska-Leipert, partner, CMS: One project we have been working on is assisting members of the general contractor consortium that worked on the construction of the National Stadium in Warsaw. Even though the stadium has been around for a while, for us the matter is not yet resolved. We are dealing with the mutual settlements of the parties’ claims and warranties. Some of the matters are being pursued in court. These are very complex and absorbing projects. We are also involved, to a similar extent, in such projects as the Municipal Stadium in Wrocław and the Silesian
Stadium in Chorzów (in the latter case we are representing the designers). Another high-profile case for our construction practice group is the Łódź Fabryczna railway station project, where we are acting for the general contractor. We are also working on a number of other infrastructure projects and are hoping for more work, especially with the next EU funding tranche now in sight.

Wojciech Szybkowski, partner, CMS: It is worth mentioning the sale of the Rondo 1 high-rise office building in Warsaw, which was last year’s flagship transaction in the office property market – and not only in Poland, but across the region. We
advised the buyer, Deutsche
Asset & Wealth Management, and assisted the client in a number of issues related to the acquisition, starting with the structuring of the transaction, through the legal due diligence and financing, and ending with transaction and post-transaction advice.

Anna Brzoza-Ostrowska, partner, CMS: 2014 was also a very busy year for us in the logistics and warehouse property market. It was a record-breaking time in terms of the number of deals we did for our clients. We were involved in the largest sales of warehouse and logistics portfolios. We are in the fortunate position of having been with some clients since they first came to Poland. This allows us to use the experience we have gained with them and to leverage our knowledge of the clients’ needs in order to make the transaction process more efficient. For instance, this was the case with Standard Life Investments,
whom we advised on the sale of a warehouse portfolio to
Logicor, the logistics property platform of the Blackstone fund. We also had the opportunity to participate in other large deals in the warehouse property market, including the sale of
Panattoni/Pramerica’s real estate portfolio, where we advised the sellers, and last year’s largest sale of a warehouse portfolio in Poland, where we also acted for the sellers – Panattoni/AEW. The buying side in that deal was a Polish investor (PZU). I believe this year could be equally interesting in this market segment. We are seeing growing interest from non-European investors – mainly from the US and the Far East – who are targeting not only warehouses, but also other types of real estate.

Przemysław Kucharski, partner, CMS: In my opinion, the value of deals in the logistics and warehouse market this year could be higher than in the commercial property market. As the Polish market is expected to become over-saturated with shopping centres, investors are less enthusiastic about that particular segment, aside of course from centres in prime locations that have been around for years. These are bringing in stable and satisfactory profits. On the other hand, we are observing a significant revival in the housing market, where developers seem quite anxious to secure land for new projects. The situation in Warsaw resembles that of before September 2008. Certainly, this is not the same market in terms of prices and deal terms – this is more about the need to build land banks. This is evidently a seller’s rather than a buyer’s market, and developers are often literally “snatching” land from each other’s hands.

Wojciech Koczara: Money is rapidly flowing into the investment market and, after the recent ECB decision, there will be even more money coming in, especially in the second half of the year. These funds have to go somewhere and the property market is currently a very appealing option. Not all of it will flow into Poland, but if
only part of it is invested here, we are still talking about big money. In my view, a large portion of it will go to the real estate market.

And there is no cause for concern that we may be faced with yet another real estate bubble and end up with many failed projects?

Wojciech Szybkowski: There is a substantial difference. Investors have learned a great deal since the fall of Lehman Brothers. We see it in our day-to-day work, which is now much more complex, since our clients’ requirements for risk assessment and solutions are much higher.

Przemysław Kucharski: In the long run, the real estate market in the region, and even in Poland, is certainly not entirely secure. It is vulnerable to market fluctuations and business cycles, but at least in our region it is already very mature and stable, and investors will increasingly often start asking themselves the question we have been hearing for a good few years: “How much can we lose on Swiss or
German bonds?”

What can we expect from the investment market in the near future?

Wojciech Szybkowski: A large number of investment funds are due to expire in the next couple of years. At the same time, we have substantial liquidity in our economy and an increased investor appetite for real estate investment. Many new funds will open. The next few years will see a lot of activity in this area.

Wojciech Koczara: There is still a great deal of property that was bought too expensively and that has poor LTV ratios – banks will be putting pressure on owners to address the situation.

Lidia Dziurzyńska-Leipert: It is also worth mentioning infrastructure projects, especially in
terms of the inflow of EU funds. These are set to re-invigorate the Polish economy – and this will have a direct impact on the real estate and construction market. The largest beneficiaries, however, will be the railways and the road sector. ν

The Backbone of the CMS Real Estate and Construction Department in Poland

Wojciech Koczara is a legal counsel and the partner heading the CMS real estate and construction department in
Poland and the CEE region. He specialises in real estate trading regulations. He has advised Polish and international investors in commercial real estate acquisition, sale and leasing deals and in development projects for over 16 years.

Lidia Dziurzyńska-Leipert is a legal counsel and a partner in the CMS real estate and construction department, where she also heads the German desk. She specialises in mergers and acquisitions, property development projects and construction litigation.

Wojciech Szybkowski is a legal counsel and a partner in the CMS real estate and construction department.
A specialist in real estate and company law, he also heads the CEE hotels and leisure practice group.

Anna Brzoza-Ostrowska is a legal counsel and a partner in the CMS real estate and construction department. She has advised clients in the Polish market for over twelve years and specialises in real estate market transactions specifically concerning warehouse and office facilities and shopping centres.

Przemysław Kucharski is an advocate and a partner in the CMS real estate and construction department. He also heads the European Union funds group. Przemysław specialises in real estate law.