Waiting for the rebound

[The full photo report of conference is available in our gallery]

It all started with Iryna Pylypchuk, the director of research and market information of Inrev, who delivered a very informative presentation on global real estate investment. From the picture she painted, one could deduce not only that the market is currently functioning at a slower pace, but that it’s going to stay that way for months or even years to come. One of those who disagreed was Mateusz Skubiszewski, the head of capital markets at BNP Paribas Real Estate Poland, who moderated the first panel discussion. He pointed out that there are those who feel the best time to invest is when the market is still down – and that we are coming precisely to that point. Jaroslav Kysela, the head of investment and portfolio management of Investica, expressed a belief in something he termed a ‘slow rebound’: “At Investica, we are constantly on the lookout for opportunities and we have plenty of capital to invest. I can’t reveal how much and when, but in the next 12 months we would definitely like to get some transactions done,” he told us.

Another ray of hope was provided by the next panel discussion, which was focused on the retail market. Retail made a spectacular comeback last year, when its performance in the CEE region matched that of warehousing. Each of these two sectors took a 32 pct share of the EUR 4.4 bln total investment volume, while offices finished third with 26 pct. The success of the retail market was built, however, upon convenience retail, such as retail parks, whereas big shopping centres still seemed to be off the radar of investors.

The office sector, which suffered the most from Covid, was the topic of the third panel discussion. And once again the panellists preferred to look on the bright side of things. “It is said that the stock market is ahead of what’s happening in the economy by about half a year. And now we can see that the valuations of the banking sector, which are very important for commercial developers, are increasing,” commented Rafał Gierczak, the head of asset management at Ghelamco. He also pointed out that consumption is likely to increase, while some prices are going down. “Not so long ago, we were all facing high energy prices. Then we were happy to have guaranteed energy prices at PLN 785/MWh – but now these prices on the free market are a lot lower,” he added. All in all, in 2024 the Polish economy is likely to fare better than in 2023. GDP is forecasted to reach 2.6 pct compared to 1.2 pct last year. Moreover, the GDP growth forecast for 2025 is as high as 4.2 pct.

After a lunch break that also gave attendees a chance for some networking, Łukasz Grzeszczyk, the executive director of Hays in the CEE region, took to the stage and discussed talent strategy as another important aspect of investment. What made his presentation stand out was that he recalled some real-life examples that had taken place during his own professional career, such as mistakes made by investors in their recruitment strategies that wasted both their time and money. Now the situation on the market is changing. “We are slowly moving from an employees’ market towards an employers’ market, although we still haven’t reached that turning point,” he claimed in his concluding remarks.

Warehousing, which for a few years has been the workhorse of the investment market, nonetheless suffered a drop in activity last year. As Karina Trojańska, the chief financing and operating officer of Panattoni pointed out, after a slowdown it is usually opportunistic investors who are the first to act – so the time has not yet come for core investors (who are more choosy and less inclined to take risks) to become active. But this also represents an opening for local investors, who can take advantage of the situation.

The final panel discussion was focused on the promising residential sector. This has been exhibiting strong demand together with, interestingly, limited supply, due to such reasons as the limited availability of land and lengthy administrative procedures. “Around 200,000 apartments will be delivered to the Polish market this year, which is the lowest supply since 2018 pct,” admitted Marcin Michalec, the CEO of Okam Capital. In Warsaw, the average price of an apartment price is now approaching PLN 20,000 per sqm. “If you’re planning to buy a flat, do it now as prices will not be getting any lower,” advised Jarosław Bator, the CEO of NDI Development. After a busy day at the conference, there was still time for everyone to go over the main points again and do some more networking over a cup of coffee.