Flat, skinny or healthy?

"You have to believe in German companies and German companies have to believe in the development of China, given that there are some question marks behind the US growth story in 2012," replied Andreas Rees, the chief German economist of UniCredit bank, when asked for his forecasts for the development of the Polish economy in 2012. His presentation came at the opening of the 17th annual end-of-the-year meeting of the real estate sector, which this time was held on December 8th. This is a good time to sum up the passing year and, more importantly, try to make predictions for the one that is about to start. Ominously, Andreas Rees ended a lot of his remarks about the future of the European Union with question marks. However, when we take a global perspective, we can see that we are in the middle of a worldwide economic slowdown, which is not limited to the eurozone.
France, Germany, the Scandinavian countries, London and Poland are the destinations that investors looking to buy properties are booking their flights to in 2012, according to the first discussion panel, entitled 'The Danger of the Double-Dip'. It featured Daniel Harris (Tristan Capital Partners), Karl-Joseph Hermanns-Engel (Union Investment Real Estate) and Alan Patterson (Axa Real Estate). Alan Patterson worried about the continuing flatness of rent revenues and as a result sees 2012 as a year of challenges. According to Tomasz Trzósło (Jones Lang LaSalle), who moderated the discussion, prices in 2012 will remain stable, but only in the case of the best products. His colleague from the same consultancy - Richard Bloxam - added that a lot of big investors could refrain from retail acquisitions altogether because they would not be able to find suitable products.
Last year developers who managed to adjust their offer to clients' needs and expectations were the most successful and increased their sales, according to the panel on the future of the residential sector, which included Wojciech Okoński (Robyg), Zbigniew Juroszek (Atal), Jerzy Tofil (Pekao Bank Hipoteczny), Kazimierz Kirejczyk (Reas) and the moderator Radosław Górecki of 'Eurobuild CEE' magazine (a presentation on the state of the market was made Katarzyna Kuniewicz of Reas). According to the head of Atal, home prices in 2012 will be stable. "Building materials are getting more expensive, but land is becoming considerably cheaper, so price increases could possibly be as low as 2-3 pct," forecasts Zbigniew Juroszek.
The key word during the discussion on retail facilities was 'modernisation'. Karol Bartos (MGPA) believes that we need to already be thinking about modernising a shopping centre at the opening of the facility. Rudiger Dany representing ECE Projektmanagement, emphasised that the period between the opening of a centre and taking the decision to modernise it is becoming increasingly shorter. "It could be as short as five years now," he wondered aloud. The remaining members of the panel, Hanna Bomba-Wilhelmi (RegioPlan Consulting), Piotr Korek (Tesco) and the moderator Wojciech Sztuba (TPA Horwath Poland), unanimously agreed that the expectations of both the tenants and customers of shopping centres have been changing, so one needs to be open to the changes and investments that go with them.
"If you were a billionaire in the United States and you wanted to become a millionaire, all you would have to do is buy a sports club. In Europe a billionaire just needs to build a hotel," joked the panel on the hotel sector, which included: Lukas Hochedlinger (Christie + Co), Konstanze Auernheimer (STR Global), Ulrich Widmer (Hilton Worldwide), Peter Vermeer (InterContinental Hotels Group) and Marek Dąbrowski (Hotel Atrium and the Chamber of Commerce of Polish Hotel Industry). The hoteliers, who were in a relatively good mood, described 2011 as quite a successful year and hoped that 2012 would also be good, if only because of the Euro 2012 football championships.
Warehouse developers also found that they had little reason to complaint. The panel on their sector included Robert Dobrzycki (Panattoni Europe), Bartosz Mierzwiak (Prologis), Maciej Madejak (Goodman), Craig Maguire (PointPark Properties) and an agency representative - Ferdinand Hlobil (Cushman & Wakefield), who moderated the discussion entitled ?The Warehousing Market - Tailored for You'. Vacancy was falling in 2011, as developers concentrated on winning clients who they could build tailor-made projects for.
There was also a lot of optimism evident on the panel that closed the conference, dedicated to the office market. Moderator Robert Z. Karniewski (Colliers International) asked the panel members for forecasts for rent rates, development costs and the hottest locations. Rafał Mazurczak (Echo Investment) and Rudolf Grossmayer (Poleczki Business Park) seemed to lean towards the opinion that rents would be stable, as did Michał Sternicki (Aareal Bank). Jeroen van der Toolen (Ghelamco) pointed out that the market had been healthy all along.