Let the sunshine in!

Some of the real estate industry’s major players gathered in Jurata for three days of fruitful discussions, tennis, pleasure and sun

Real estate people are simply unique. You might have heard that many times before, but the 4th annual Polish Property Conference & Market Integration conference organized by Eurobuild Conferences attested to this fact once again. Two things just don’t go together – Jurata, Poland’s lovely pearl on the Baltic, and suits. But the real estate movers and shakers who participated in our conference remained serious and stuck to the strictly-business dress code. There were reasons for the serious faces among the influential crowd. It may have come as no surprise, but the continuing crisis was on everybody’s mind, no matter what the actual topic of the discussion was.

So is the worst behind us? It depends who you ask. The participants of the ‘In the cash kingdom’ panel – Richard Mbewe, managing partner of Atria Real Estate Partners, Sławomir Szeremeta, vice director of the project coordination department at Bankowy Fundusz Leasingowy, Michał Sternicki, general manager of Aareal Bank and Agnieszka Jachowicz, property funds managing director at BZ WBK AIB TFI – agreed that we are still outside the cash kingdom, with very few market players having been granted a visa. “As far as I know only four banks are currently lending money to developers and property funds,” Ms Jachowicz pointed out.

But are cities being any more generous than the banks? The panel entitled ‘Cities on a spending spree’ hoped to settle the question. The possible pipeline of PLN 25 bln worth of PPP projects in the twelve largest Polish cities certainly sounds impressive. But as Paweł Kuglarz, a partner at Beiten Burkhardt law firm put it: “the situation is normal, not hopeless, which only means that it is worsening.” This may sound like a haiku, but it is true: projects are out there, but at this point there is a lot of talk and much less action. Daniel Laske, owner of Mobicon, explained that some Polish cities are still mired in bureaucracy. Błażej Kucharski of the city of Gdańsk’s Entrepreneur Service Centre commented: “Fair enough, but city administration is also evolving rapidly.” Igor Marszałkiewicz, deputy mayor of the city of Radom, added: “We have four large projects that can be carried out within the PPP framework, but investors are being extremely cautious these days, putting everything on hold.” Dariusz Kacprzyk, director of the corporate clients department of BRE Bank, and Aleksander Hetko, another legal advisor from Beiten Burkhardt, agreed that choosing the cheapest offer in a public tender does not always lead to the best results.

The ‘Big Box: big profit or big problem?’ discussion brought together people devoted to the least appealing real estate sector, according to a number of market players who asked for anonymity: warehousing. Monika Hapter, business development manager at GSE Polska, Iwona Załuska, president of Upper Finance, Joanna Kowalska-Szymczak, head of investment, land and development at DTZ, Waldemar Olejnik, development manager of Segro and Christopher Brzeziński, product country manager of GSE, agreed that the Polish warehouse market is quite an unusual one, with 70 pct of the market being divided between six major players. But as DTZ’s representative commented: “German funds are looking at opportunities in Poland and smaller players with cash are about to make some important acquisitions.” Sounds interesting. Regarding the financing of warehouse projects, Iwona Załuska was clear: “One rule still applies – the banks can easily give a loan, but at a tremendous price.” Of course, this comes after the developer has been obliged to secure up to asmuch as 50 pct of the financing on its own.

The residential market is also dealing with problems of its own. The latest REAS report, presented by the company’s senior consultant Karol Dzięcioł, showed that in spite of our greatest hopes we still need to face the not particularly pleasant reality of thousands of unsold homes. Kornelia Bargielska, proxy of the Board of Ekolan, the TriCity based residential developer, was optimistic: “We are seeing an increasing interest, the buyers are coming back and we are planning new projects.” Krzysztof Stępień, main economist at Expander Advisors and Paweł Kuglarz of Beiten Burkhard, were less optimistic, but yet still able to appreciate some positive signs on the market.

Even after the conference moderator Ewa Andrzejewska announced the end of the conference, the panellists still had one major topic to discuss: the upcoming ‘Eurobuild CEE’ Tennis Tournament. Our event attracted the best tennis players in the industry. There could only be one winner, however – PBG Dom’s Michał Korwin-Małaszyński. Grzegorz Czaus of Ozone architectural studio enjoyed second prize, while EC Harris’ business development director Krzysztof Kałuża and Łukasz Krawczyk had to share the third prize. Happily, there were no tears. As the party that followed afterwards demonstrated, everyone who made it to Jurata this year was a winner. ν (MP)