In need of some hygge in November

Small talk
Søren Rodian Olsen, the managing director of Logicenters Poland, Nrep and an executive committee member of the Urban Land Institute in Poland gives us his take on the health of the various sectors of the Polish real estate market – and also tells us how Danish people like to unwind as the nights draw in

What’s your view of the outlook for the real estate sector in the near future?

Søren Rodian Olsen, managing director of Logicenters Poland, Nrep and member of the executive committee in Poland of the Urban Land Institute (ULI): While the market is still very much in a period of change, it’s fair to assume that it will pick up during the second half of next year, but in the meantime there will be limited investor activity. We are seeing several occupiers of commercial buildings putting off decisions to sign new leases. In my opinion, the situation is going to get a little bit worse before it gets better.

Which sectors do you find most attractive at the moment?

The most active right now is the logistics industrial sector. This is an area we are very happy to be able to deploy our capital in, and we will continue to invest in this sector in the markets where we are active, which includes Poland. This is still a sector where you can see healthy activity, although it is much lower now compared to what it was a year ago.

Any other sectors?

There seems to be some activity in retail, which is very exciting to see, and mostly retail parks, which as I understand are continuing to operate very successfully on the Polish market. But everyone is concerned about offices. First of all, there’s not much development activity in the office sector right now in Poland, and there’s no great focus from investors on buying new offices. There have been a few small deals conducted in Warsaw and in regional cities, but generally the activity is very low. People are concerned about the future of the office market. Will offices still be able to attract people? I think the answer is definitely yes, but the work model has been changing and we still need to find out whether a company that employs 500 employees actually needs an office for all of them.

That leaves us with the residential sector…

And this is a sector in which Nrep is very active and where we are continuing to look for potential investments. Our focus is on standard residential for rent (PRS) as well as serviced living concepts, and recently we have also been considering entering student housing. We successfully launched one PRS project in Warsaw last year and we have a new development that is soon to be opened under the Noli brand in Warsaw’s Mokotów district.

Is the rapid development of the PRS sector a natural step for CEE countries, or is it an outcome of the recent geopolitical and economic situation?

I think that the development of the PRS sector was going to happen in this part of Europe regardless of the geopolitical conditions. However, the current situation has fuelled the demand for residential product for rent. It has pushed rents up substantially, but there was always going to be a natural demand for professional PRS product. There has always been a private rental market in Poland, but this was previously entirely in the hands of private landlords, and so the quality of the product was often quite poor, as least compared to what a professional investor or PRS operator can now offer. This sector will continue to grow. The biggest challenge right now for investors and developers is the level of inflation and the high cost of debt.

What’s your view of the development of Warsaw?

I’ve been living in this city for 21 years. I find it extremely exciting to see how neighbourhoods like Praga and Wola have evolved from being post-industrial areas with very poor communities and inferior architecture to what we can see today. Praga is still a ‘project in process’, whereas Wola has already become a new and vibrant central business district. The great thing is that Wola has been evolving as a combination of office and residential buildings, avoiding the situation that we witnessed in Służewiec and office districts in certain other cities that become quite dead during the weekends because tourists only go to the city centre and there are no local residents. Warsaw has a lot to offer – and that’s probably one of the reasons I’ve spent so many years in Poland and have been lucky to benefit from a variety of job opportunities here.

November is one of the least popular months in Poland. Would you help our readers to find some hygge as the nights draw in?

I have to say that November isn’t my favourite month either. It’s when I usually try to squeeze in a holiday in some warmer place. Hygge is a feeling that Danish people try to create for themselves. It is a moment of serenity, warmth and relaxation, a feeling of calm and safety. I would suggest a hot cup of tea, some mulled wine, lighting a few candles and a good book – ideally in front of your fireplace, if you’ve got one. When the days are short, candles help to create a cosy atmosphere. It’s no coincidence that Denmark is the world’s largest consumer of small candles per capita. But hygge is not something that can be found. You create it yourself.

Interview: Anna Zamyłka