A tale of two cities

Small talk
Mark Richardson, the head of investment of Savills Poland, explains why he has now returned to Warsaw after a spell in Prague and about the differences between the investment markets in the two countries

I see you used to be based here in Poland, but then you went to the Czech Republic. And now you’re back?
Mark Richardson, head of investment, Savills Poland: My background is that I was originally working in the Polish real estate market, investing and growing assets under management for Pradera, a specialist investment and asset management company based in London. I established the Pradera office and local asset management platform in Warsaw back in 2006. At the time, Pradera was seeking to acquire shopping centres and retail parks on behalf of its PCEF and POERF funds. Throughout that time, I got to know both the country and the Polish real estate market well. I lived in Prague between 2002 and 2018, so I became equally familiar with that country and the CEE region. I joined Colliers in December 2019, as a director of their investment team in Warsaw, before I moved to Prague in September 2021 to head up investment in Colliers’ Czech office. I speak basic Czech and know the city well, so it was a great opportunity for me to re-connect with many Czech investors and funds who were increasingly seeking to invest outside their own market and into Poland. Czech real estate investment volumes are typically EUR 1.5–2 bln in a good year, whereas Poland can of course record volumes of 4 to 5 times this level. But the exciting opportunity I was offered to join Savills and grow its business further in Poland ultimately proved to be too tempting.

What’s it like to be back?
It’s fantastic. This is a very vibrant country. There’s a lot of energy and change continues to happen at pace. Not only is Poland the fifth biggest economy in Europe, but it is projected to overtake the UK in terms of GDP by 2035. It just shows you how quickly it’s growing and I want to be part of that. Whenever I have found myself talking to investors active across Central Europe, we spend ten minutes discussing the Czech Republic and half an hour talking about Poland due to its scale and levels of liquidity.

Could you give us a quick overview of what the investment market is like here in Poland?
I think that here in Poland the investment market is no different than the rest of Europe, where what we have seen is a period of relative illiquidity. As the prices of real estate across the globe have fallen (not just in Poland and the CEE region), buyers’ and sellers’ expectations have been different. Investors fearful of further declines in pricing have been reluctant to commit to transactions. Some now appear to be waiting for the market to bottom out, as interest rates and the cost of borrowing across the globe appear to be easing With the cost of debt increasing, investors have had to adjust the return profiles that they had been seeking, which has in turn had a negative impact on both yields and real estate pricing. The market appears to be taking time to adjust and correct itself.

You’re saying there’s nothing specifically different here in Poland?
There is a difference in the sense that there is very limited domestic institutional Polish capital seeking to acquire real estate in Poland and therefore the Polish market is to an extent reliant on foreign capital, which views and compares the yields and pricing of Polish real estate within a European or global context.

Does your coming here mark a change in strategy for Savills, or just a change in personnel?
I think that it accentuates Savills’ strategy. We are seeking to strengthen our range of services for investors in Central Europe and will expand our investment service provision and team in Poland, while we will cooperate with other business lines, including our Living team, a local leader in the PRS and PBSA sector. I’m confident that thanks to our international experience on both the investor and advisory side, and our extensive knowledge of each real estate sector, we will be well-positioned to grow the Savills business in Poland when more positive investor sentiment returns.

Well, I’m going to move on to my final question which is normally always the same, which is: how did you spend your summer?
In Majorca. Watching my kids do handstands in swimming pools. Well, joking aside, I’ve got a holiday home in Majorca, so my young family typically spends four weeks there during the school summer holidays.

Interview: Alex Hayes