Turning distress into success

The fund is managed by Golub GetHouse - a joint venture set up by Golub and Company of Chicago and GetHouse Developer of Warsaw. Golub has been operating in Poland since 1989. One of its first projects was the Warsaw Financial Center on ul. Emilii Plater. GetHouse Developer was established in 2006 and made its first investment with the purchase of a plot in Warsaw's Wola district. "We are currently negotiating other purchases and are hoping to close at least one transaction by the end of the year. We look for attractive properties suitable for office and residential development located in the centre of Warsaw and other big cities in Poland," says Czarek Jarząbek, partner and president of the management board of Golub GetHouse. Golub GetHouse Property Fund FIZ was established in March 2011. Who is behind it? From publicly available information it is clear that its main investors are Polish open pension funds Aviva OFE and Amplico OFE. Another investor is a private investment fund of the Radziwiłł family and the American UNIS Real Estate Fund. The fund is managed by Towarzystwo Funduszy Inwestycyjnych Forum of Kraków and its legal partner is Oleś & Rodzynkiewicz (also of Kraków). "Eventually we want to raise PLN 150 mln. With leverage these funds will enable us to invest in projects with a total value of app. PLN 500 mln," reveals Czarek Jarząbek.

A skyscraper to start with
A 22-storey class 'A' office building is to be developed on the Grzybowska site with a height of over 80m and a total leasable area of around 21,000 sqm. The design of the tower block is being prepared by the Warsaw-based Epstein architectural studio in cooperation with the Solomon Cordwell Buenz studio of Chicago. Golub GetHouse has yet to disclose the price for which the land was bought. The head of the company would only reveal that he is looking for plots that might be problematic for their current owners, in other words, distressed property. "Some developers miscalculated when it came to investment. We believe that now is the perfect time to take over attractive locations at lower prices. Still, I have to admit that finding such properties in Poland is not an easy task. Our market was not as overheated as western ones," explains Czarek Jarząbek. The minority partner in the case of Grzybowska is Irelandia - the investment fund of the Ryan family of RyanAir fame. The project will be partially financed by loans. Construction work should start at the end of this year. Golub GetHouse is soon to apply for a so-called replacement building permit, as the former owner only had a permit for the construction of a luxury apartment building.

Building trust
Golub GetHouse Property Fund FIZ is not the first fund established by Golub GetHouse. In 2010 the company attracted a number of private investors to several distressed projects. "Interestingly, we were mostly appreciated by Polish investors. At the time nobody abroad wanted to hear about investing in real estate, but in Poland we managed to raise several million złoty. In the end, the private entities who invested in our fund came from Poland, the USA, the UK and Israel," recalls Czarek Jarząbek. Golub GetHouse bought an unfinished residential estate in the centre of Pruszków at that time. "The situation was complicated because the then owner, Edbud, was about to go bankrupt," he explains. When Golub GetHouse took over the unfinished estate, 90 apartments had already been sold. It was designed to eventually offer 280 flats, which Golub GetHouse is currently finishing the construction work on. Around the same time the management of the company started to talk about cooperation with open pension funds - and this is how Golub GetHouse Property Fund FIZ was born.

This is not the end
"This is the first closed fund invested in by a Polish open pension fund that is not listed on the stock exchange. Moreover, the fund is managed by an experienced developer. We want to show other pension funds that it is profitable, and hope that our success will result in a considerable increase in capital. We are not ruling out the possibility that will be able to convince other open pension funds," declares Czarek Jarząbek.