Time to show what we can do

Small talk
Łukasz Mazurczak, the managing director of MVGM, tells us about the evolving role of the property manager in the new reality – and how the PRS market in Poland is becoming increasingly attractive, not just to investors but to managers too

The beginning of the year is a busy time for property management firms. Has this been the case for MVGM?

Łukasz Mazurczak, managing director, MVGM: Definitely. The beginning of the year has brought us new management mandates and a broadening of our relationships with existing clients. In particular, we are happy to have received contracts from the logistics sector and PRS. For example, we’ve signed a contract with a residential developer that is launching on the rental apartment market. We are to be responsible for advising on the finishing and fitting out as well as the building’s commercialisation. For another client we have completed a full technical, functional and commercial analysis for a PRS property. Moreover, many of our clients are expanding their collaboration with MVGM and entrusting us with more projects. One excellent example is our work with Savills Investment Management, for whom we manage the Gdański Business Center office complex in Warsaw. The company has now decided to hand over the management of three of its warehouse properties to us.

Why do you think is there so much interest in PRS?

PRS and the platforms dedicated to it are still a novelty for us, which means that there are huge opportunities for development. The changing situation on the residential market, which is above all due to the interest rate rises and the falling credit ratings of potential buyers, is having a huge influence on the interest of investors. Such factors also have a significant effect on the supply, because residential developers are seeing a fall in the interest and purchasing power of potential buyers, so they are often putting their new projects on hold. Investors believe that PRS projects are very interesting because they meet a crucial need, the need to live somewhere – and this is what makes it a safe asset to invest in. The Covid-19 pandemic clearly showed that when the market and the macroeconomic environment become unpredictable, it’s possible to get by without shopping centres and offices. Banks are also in theory inclined to invest in the rental apartment sector, even though the current cost of such financing generally doesn’t fit in with their investment models. To summarise the situation, the demand is always going to be there because people will always need homes. One factor that complicates the investment a little in this sector is the fact that in Poland it’s denominated in złoty.

So would you recommend assets in this sector as an investment product?

I certainly would. We are advising our clients that now is a good time to build PRS product for when it will be easily saleable. I believe that in a year or two the financial market will calm down and let’s hope that the war in Ukraine will also end soon. This is the appropriate time to build up a base, to scale up and create a good operating platform and to gain the necessary know-how. When investors start buying, only those owners that have prepared adequately will have attractive assets for sale.

Is the PRS sector equally attractive to managers? And if so, why?

Absolutely, and this is because in Poland it is above all a relatively new market. There’s not a lot of competition in it and companies that provide services for the PRS sector are only just beginning to emerge and develop. MVGM has a lot of experience due to our management of properties in Europe. We have around 100,000 apartments and houses under our wings, so we have something to draw our experience from and we know how to implement it in Poland, where our portfolio includes almost 1,000 rental properties. Creating and implementing an institutional rental platform is also an interesting challenge and one we are eager to take on.

With such huge changes in the market, how has the role of the property manager been evolving?

With inflation soaring as well as energy prices and what’s happening across our eastern border, the role of a proactive property manager has massively grown in importance. A good manager is able to master all the critical factors and not allow costs to creep up in unexpected ways. Now managers have the chance to show what they can do and that they are able to foresee and plan costs as well as communicate all of this clearly and precisely to the property owner.

As a property manager, how do you assess 2022 and what can we expect over the months to come?

The factor that couldn’t have been predicted last year was the war in Ukraine and its impact, especially on the global economy. In Poland, these effects were above all felt in the form of rising energy prices and inflation as well as investor uncertainty. Nevertheless, from my property manager’s perspective, I have a very optimistic view of the future of the real estate market.

And what does a good property manager do to relax in his spare time?

I am a dedicated skier, so whenever I can I go to the Polish mountains or to the Alps. There was even a time when I represented my local skiing club. Winter sports, skiing and skating, have always been my passion. After all, I was even on the team that won the Eurobuild CEE skiing tournament! My colleagues from JLL and I won the team event on the Górka Szczęśliwicka ski slope in Warsaw and even today I treasure my gold medal and team shirt.

Interviewer: Anna Korólczyk-Lewandowska