A calculated risk

For the same reasons, we can’t predict with one hundred percent certainty what the interest rates will be in six to twelve months’ time, where yields will end up, or whether the investment transaction volume is going to reach its expected level. After all, we’re operating in a field in which even Oppenheimer would have to work with a large margin of uncertainty. This doesn’t mean, however, that there’s no point in making any such calculations. Without mathematics, we wouldn’t be able to achieve profitability in the first place or establish the conditions for refinancing a project – even though it’s often only approximations or guestimates that are fed into these equations. But these estimates will eventually turn into hard figures in the future. Statistics and analysis can better reflect the future reality than even our best guesses.

It’s better not to trust our own intuition when we can actually measure something – and I say this based on my own hard-earned experience, far removed from the world of quantum physics. I am the owner of two duvet covers with a width of 140 cm, but I don’t have any duvets of this size. My garden is completely dominated by a large tree, which was just the right size when it was planted; and I also have the biggest washbasin on the planet, because without using a tape measure I made the decision that it would be the perfect fit for my little bathroom. I am trying to improve in this regard, so I’ve bought myself a set of kitchen scales – in a so far vain attempt to avoid making the flattest, brownest meringue imaginable and turning cheesecake into an inedible goo. When I bought myself a new watch strap I even measured it with a pair of callipers. I also try to remember that each day only has 24 hours, that a year has 365 days with an extra one every four years, and that life doesn’t go on forever.

Łukasz Drozda in his book ‘Holes in the Ground. A Pathological Developer in Poland’ encourages us to be sceptical when developers try to convince us that all the latest home appliances can be fitted into a particular space. It could just turn out that despite such assurances the measurements in the plans are not adequate to accommodate a standard fridge or even a table. Of course, it is possible to fit them in, but only when you buy smaller than standard models – which means that the spaciousness of the room is just an illusion created on paper. So to be a homeowner these days, you have to calculate not only your creditworthiness but also how your future apartment is actually going to function.

You also have to ask yourself whether you actually need so much space. And maybe it would just be better to own fewer things. Sometimes it’s as though I could build with all the stuff that litters my home the Tower of Babel or at least something so tall that it would disrupt the spring and autumn migration of bats and birds. That’s why I really admire the much more spartan approach of Keret House in Warsaw’s Wola district, which was designed by Jakub Szczęsny. It’s just 14 sqm. OK, it’s an art installation, but it also serves as a home for artists in residence. You have to admit, though, that it would be rather tricky to throw a house party there.

But before we start calculating, we should check out the figures we are actually feeding into our equations. On the ‘Eurobuild CEE’ site, the word ‘park’ crops up 8,424 times, far more than the Polish word for office building or the word ‘volume’ – but this says nothing about how many trees are being planted in Poland. Of course, the word ‘park’ in our sector is overwhelmingly used to talk about warehousing and retail complexes and not about the ‘parkification’ of areas designed by landscape architects. And when we calculate how profitable a project is, do we factor in the environmental costs? How exactly do we put a number on those? Which factors do we consider and which do we leave out?

For the real estate sector, calculating carbon footprints can be a struggle, all the more so because there is a lack of standardised rules for doing this. So it’s important that – just like Oppenheimer – we try to keep things close to zero, otherwise our world will very probably come to an end – or at least, the world where it has been so nice for us to live in up until now.