A spirit of cautious optimism

As one year ends, whether you like it or not it is time to summarise the last few months and try to sketch out the future. To find out what to expect in 2011 you could go to a fortune-teller, look at your horoscope or... devote a day to listening to experts in your field

On the eighth day of December about 200 inquisitive individuals arrived at the Warsaw Hilton hotel to get better acquainted with the latest trends on the construction and property market. It is always better to know your enemy, i.e. the dangers for the Polish economy this year, including the situation in neighbouring countries such as Hungary, speculative inflows and outflows of capital, the state of public finances with regard to public debt... these were the most important worrying developments. However, the list of opportunities is much longer. In the opening speech Anna Zielińska-Głębocka, economics professor and member of the Monetary Policy Council, emphasised the continued growth of Polish GDP (which amounted to 4.2 pct in Q3, according to the Central Statistical Office), high domestic demand, the slight recovery in investment (albeit dominated by the public sector) and the high retail sales indices, among other positive signs. When asked whether she was a pessimist or an optimist, the professor replied that she was a cautious optimist. Such was the spirit of the whole conference, which was led by ‘Eurobuild CEE’  editor Ewa Andrzejewska.
Which of us does not dream of being allowed to join an exclusive club? The real estate market, which has just reached maturity, made some significant progress in a crisis year for the global economy. “Poland has left the CEE region and joined the Western circle of key markets,” announced Karol Bartos of MGPA. This was said during the discussion panel entitled ‘The best are still the most tempting’ and dedicated to the investment market. He was accompanied by Wojciech Pisz from Cushman & Wakefield, who led the discussion, Manfred Wiltschnigg, representing  Immofinanz, and Michael Kröger from German bank Helaba. In 2010 investors were still interested in top-shelf products. Such Polish properties are an alternative to Western European facilities. There was only one small worry – why get rid of the goose that lays the golden eggs? This year will show whether investors have enough confidence to start looking outside Warsaw.
In the provinces they might find some good investment products, such as shopping centres that are being built in the smaller towns – but this is by no means an indication that the Warsaw retail market is already saturated. Here developers also have the chance to show what they can do. According to Maciej Wróblewski of Apsys Poland, who gave a presentation on the development of this sector over the last two decades, the next few years will be marked by investment in the extension and modernisation of existing facilities, if only because of the lower costs compared to starting a project from scratch and the greater possibilities for securing finance for such projects. The other participants of the discussion – Anna Duchnowska of Polonia Property Fund (who led the discussion entitled ‘Cleansing Time’), Grzegorz Mroczek representing Caelum Development, Maciej Tuszyński of  Westdeutsche ImmobilienBank and Tomasz Rydlewski of the BOIG agency – believe in stable but cautious growth over the next few years, which will benefit the best projects. Rudolf Grossmayer, representing  Poleczki Business Park, seems to be less of an optimist, particularly after hearing Bartłomiej Hofman from Europolis, who believes that the time for lowering office rents, particularly in Warsaw, is finally over. The office market experts who made up the ‘End of the discount season?’ panel believe that perhaps this year but certainly 2012 will see the beginning of a more prosperous period. The panel included Anna Kot of Jones Lang LaSalle (the moderator) and two developers: Nicklas Lindberg from Skanska Property Fund and Radosław Sieroń of Mermaid Properties.In the next discussion experts in warehouse investment – Tomasz Olszewski of Jones Lang LaSalle (the moderator), Magdalena Szulc of Segro, Robert Dobrzycki of Panattoni Europe, Bartosz Mierzwiak of ProLogis, Craig Maguire of PointPark Properties and Yann Belgy representing FM Logistic – talked about the current trend for low rents. The developers emphasised that this year they would continue to concentrate on filling up empty space and the construction of facilities to suit the requirements of actually existing clients. But we will have to wait for another crop of speculative projects to appear. Before the lunch break the atmosphere in the room was heated by Magdalena Tulaja and Izabela Anuszewska from the Millward Brown research institute, which was commissioned by Eurobuild to prepare the tenant survey for the Eurobuild Awards. However, in order to find out which shopping centre, office building and warehouse were the best in the country, you had to wait until the Eurobuild Awards gala.
Next it was the turn of experts from the residential market: Kazimierz Kirejczyk of REAS, Szymon Jungiewicz of Emmerson (the moderator), Zbigniew Okoński of Robyg, Andrzej Szornak of Gant Development and Marek Koziarek, representing Pekao Bank. Even though in their opinion the sector has started to emerge from the crisis that began in the last months of 2008, we should not count on their being any increases in the prices of homes. After a relatively difficult year hoteliers are looking to the future with some hope. In the panel entitled ‘Projects whose stars will shine one day’, Janusz Mitulski of Horwath HTL (the moderator), Magdalena Sekutowska representing the Hilton chain in Poland, Andrzej Wójcik of PUHIT, Rafał Bakalarski of Hotele Diament and Aleksander Pietyra of the Polish Hoteliers’ Economic Chamber, emphasised the great potential of the Polish market, the interest of international players in being present in the country and the excellent results of smaller local hoteliers. The meeting was summarised by a panel dedicated to land issues called ‘Where to build?’, which included Marek Cieślak of the Łódź Special Economic Zone, Tomasz Nawrocki from the  Agricultural Property Agency, Dariusz Dobkowski representing KPMG D. Dobkowski Law Firm and Andrzej Nizio of Marvipol. There can only be one answer to that question – on the cheapest land and in the best location. According to Daniel Puchalski of Colliers International (the moderator), the situation has been slowly livening up since the mid-2010, but are things returning to how they were before the crisis? I hope that after the lessons learnt in the last two years, the market is starting to resemble how it was in the final years of the boom – but not too much.