Experience and resources

Small talk
Marcin Malka, the CEO of Polish developer Real Management. on how the company has shifted its focus from investing to developing, which sectors it is now focused on, and his love of winter swimming

The new year is a good time to look back as well as forward. How have the last few months been for Real Management?

Marcin Malka, CEO, Real Management: 2023 was an exceptional year for Real Management, since we saw the effects of our new RM 2026 strategy to gradually cease investing in projects and become completely involved in our development activities, while specialising in two sectors – premium apartments and industrial projects (life & science buildings, BTS, industrial and manufacturing parks and specialist construction). It is important to us to concentrate on value-added real estate with projects that start with a large number of pre-lease contracts and long-term rental agreements. The launch of construction work on Neo Natolin was definitely a key event for the firm at the beginning of last year. It’s a large estate of single-family homes with 84 under construction in the first stage and a total useable area of 17,000 sqm. This gives us the opportunity to demonstrate our know-how, which is our placemaking ability, as well as to communicate this to the market. The other big milestone for Real Management was the start of the development in November of the 30,000 sqm gla Good Point V warehouse park in Łubna. The park is 80 pct leased and negotiations are underway with potential tenants for the remaining space.

And what was last year like for the rest of the market in your opinion? What should we expect in 2024? Which sector is going to see the highest growth?

In my opinion, the commercial sector was meaningfully affected by the increase in yields as well as the outflow of funds to other asset classes. Due to the differing price expectations of buyers and sellers, the investment market was also limited. If we also add to this the reduced tenant activity, the future is looking rather uncertain with limited development activity. Last year was good for the residential and PRS markets. In my opinion, these two sectors saw more activity. When it comes to 2024, I believe that the difference between buyers’ and sellers’ price expectations will shrink in the retail sector, but despite the promising outlook, I’m not expecting any kind of breakthrough on the investment market in 2024. We are expecting greater tenant activity and the e-commerce market to stabilise and grow while manufacturing and warehousing will continue to relocate to Europe. The residential market will stabilise in 2024, in terms of both the pricing and supply after all the changes we saw last year. At the beginning, there was limited demand and later there was limited supply, which combined with inflation led to a rise in prices. We are still expecting changes regarding the availability of land for construction and a reduction of bureaucracy when it comes to project preparation, but it’s still too early to judge how the new government’s approach will help the development sector.

As you mentioned, you’re currently developing Good Point V in Łubna. What are you doing to look for tenants in such an uncertain environment?

I have to say that the entire warehouse sector is currently contending with a high vacancy rate, reduced tenant activity and longer project preparation. In particular, it now takes much longer to obtain environmental decisions. With this we are also having to contend with the reduced activity on the investment market that I mentioned earlier. That’s why we are pleased that we have been able not only to prepare the Good Point V project and obtain the necessary permits but also start the construction work. As I already said, we have signed leases for 80 pct of the space, including with such companies as Dr Irena Eris and OEX Fulfilio.

What plans does Real Management have for the new year? Maybe there’s some spectacular project or an exceptional new development?

We plan to continue with our strategy. Since we want to expand further into the residential sector, we are studying the opportunities on the land market. Our other branch, which is industrial construction, is working on obtaining building permits for two new warehouse parks with a combined area of 140,000 sqm gla. We are also considering growing the company through raising capital. We are already at the stage where we can combine our resources with outside funding. We are looking into bonds and corporate financing as well as looking for the support of a strategic investor.

And what does the boss of Real Management like to do in his own time?

After work, I like to spend my time with my family and when I have the chance I go running, or cycling in the spring and the summer as well as hiking in the mountains. In the winter I love to walk in the woods and I go winter swimming. You see, I do everything [laughs]. When it comes to other ways of spending my time, I started an Executive MBA in October which is overseen by two colleges: ESSEC in Paris and the Mannheim Business School.

Interview: Anna Korólczyk-Lewandowska