Investment stays on course

The conference was opened by Sean Doyle, the director of capital markets at CBRE Poland, who outlined the situation on the investment market in CEE countries to those in attendance. Poland looks good against this background, even though it may not be able to repeat its all-time high volume of last year.

The first panel, entitled #agoodchange.pl, was moderated by Tomasz Trzósło, the managing director of JLL in Poland, and generated a great deal of heat. Its panellists shared their assessment of the impact of the current political situation on the market and concluded that a global look at the market and the international environment was needed. Przemysław Krych, the president of Griffin Group, recommended slowing down the legislative processes and more consistency. Katarzyna Zawodna, the president of Skanska Commercial Development Europe, made a similar point and hoped that a strong legal framework would be maintained and Poland would continue to be perceived as a partner rather than an opponent of the European Union. Włodzimierz Kocon, the vice-president and first deputy of the president of Bank Gospodarstwa Krajowego, expressed his hope that the direction that had been taken would be maintained and that the gloomy portrayal of the situation was just media hysteria rather than a genuine reflection of reality. Radosław T. Krochta, the president of MLP Group, recommended that the government should take more comprehensive rather than piecemeal action and that its long-term strategy should be made clearer.

The next panel, ‘The state of the investment market in Poland’, was moderated by Mikołaj Martynuska, the senior director of the development consultancy at CBRE. The panellists wondered which point of the business cycle Poland was currently at, and where the optimism of developers was coming from and how investors should respond to the current situation. Dorota Latkowska-Diniejko, a partner at Reino Partners, argued that the office market has the best prospects because real demand exists for its products. The retail segment, however, is the most vulnerable in the current situation on international markets as currency exchange fluctuations could potentially be very disruptive.

Karol Bartos, the executive director of portfolio and asset management at Tristan Capital Partners, pointed out that the market is expecting an increase in European interest rates in the medium term. This will be a fundamental change for the real estate investment market, because funds will be able to invest in assets that under the present interest regime do not compete with real estate. However, opportunistic investors might start shopping if this changes. “The market abhors a vacuum,” emphasised Karol Bartos.

There is no doubt that investors will have no shortage of real estate product to pick from. This was discussed by Maciej Klukowski, the real estate turn-over director at Orange Poland, during his presentation entitled: ‘The recipe for revitalisation when land is not available in urban centres’.

A sufficient range of credit options has to be available for investors to obtain the right product and to be able to finance its purchase. It might seem that in an era of cheap money obtaining a loan is not a particularly difficult challenge. The panellists of the discussion, which was devoted to financing commercial real estate and was moderated by Maciej Tuszyński, a senior partner and head of real estate financing at Griffin Real Estate and Griffin Property Finance II, discussed the fact that the situation is not so clear and loans are not granted at the drop of a hat.

After the coffee break it was time for the detailed part of the conference, which was devoted to more specific real estate market phenomena. The discussion panel focused on the planned introduction of Polish REITs enjoyed a great deal of attention. Its eight panellists suggested approaches worth adopting for the local versions of the institution as well as those that are best avoided. At the end they expressed their hope that consultations with market representatives would take place for the draft of amendments for Polish REITs.

There was also a heated discussion during the panel entitled ‘The way to real estate’, which was moderated by Daniel Bienias, the managing director of CBRE Poland. Is it worth investing in alternative asset classes? Karol Bartos of Tristan Capital Partners stressed that whenever things hotted up on the market, investors started talking about these classes. However, the main barrier to taking that route is knowledge. Because of this Tristan is planning to continue to focus on the four basic classes. “There is no need to turn towards alternative assets, if we still can spend money on what we know best,” concluded Karol Bartos.

Then it was time for two presentations. DLA Piper lawyers Michał Pietuszko and Jacek Giziński discussed the most important aspects of the law on agricultural real estate and its very real impact on the commercial real estate market. In the second presentation, Justyna Bauta-Szostak, a legal counsel, tax advisor and partner at MDDP, gave an interesting presentation in which she discussed the implications for investors of this year’s introduction of the tax law circumvention clause.

Then the question ‘what to invest in’ returned to the discussion forum. The panel that bore that name was moderated by Katarzyna Dawidowicz, the president of Comparables. Almost all classes, including holiday real estate, were up for discussion, even though when the question of the latter class was raised it was such a surprise that it was never answered. Finally, Rafał Szczepański, the vice-president of the board at BBI Development, proposed the bold thesis that it would be more and more difficult to deliver exclusive product to the market in the future, but at the same time he also boasted that Polish football striker Robert Lewandowski had bought a luxury apartment in the Złota 44 skyscraper in Warsaw.

The panel entitled ‘Real estate small fry’, which was moderated by Mariusz Kurzac, the general director of Cenatorium, generated much excitement. Two schools of making money from real estate locked horns during the discussion: the international school, characterised by its detailed analyses and corporate style, against the local approach, which is less formal, more emotional but no less effective. Those who missed the debate should really regret doing so. The content-related section of the conference finished with a presentation by Joanna Wolff, the deputy director of the economic development department of the Polish Information and Foreign Investment Agency (PAIiIZ), in which she provided an analysis of the most attractive Polish cities, towns and regions in investment terms.

And then it was time to wind things up and carry on the chat, the reunions and the making of new acquaintances at the cocktail party, which closed the 2nd Invested Interest – Investment Market Conference.