Goodies on the top shelf

Zuzanna Wiak, Matei Roman

Show me someone who doesn’t prefer to live in luxury, to take a daily dip in their own pool, to summon a concierge to satisfy their latest whim or to hang out in the evening in a club for the rich and privileged.  All of this is available – but only for a select few

Specialists will tell you that top of the range apartment buildings in Poland are very few and far between. Magdalena Zakrzewska, head of the residential properties section at Knight Frank, puts it this way: “The luxury apartment market is like a reflection in a distorting mirror. There are no exclusive city streets as in London and New York, where deluxe apartment buildings of similar standards stand side by side. Here, upmarket projects are often built next to buildings of a deplorable standard and so immediately lose out by the very presence of such neighbours. There are also very few development plots in the city centre, which is why top quality investments are often sited in old tenements that are terribly difficult to reconstruct.”

Indeed, there are only a few projects of this type – and those which see the light of day are mainly constructed in Warsaw. They can also be found, intermittently, in Kraków and Poznań, among other locations. One such project is Ludwinów Apartments, neighbouring Wawel Castle, with another example being Elite Garbary Residence in Poznań. But are these really exclusive apartments? The flats range from 27 to 33 sqm in size – hardly deluxe dimensions.

Birdseye view

Luxury apartment projects can be divided into three categories: high-rise residential towers, old buildings that have undergone renovation and small intimate buildings. The first category includes the Złota 44 building, a development by Orco Property Group. Another high-rise project under construction in Warsaw is the two Platinum towers by Atlas Estates. The complex is to be situated next to the Hilton Hotel, with which it will share the same services.

  The Polish-based developer Prestige also had concierge services in mind when planning the Prestige Residence apartment building on ul. Kolektorska, although the idea seems to have fallen out of favour with the developer. This will be one of the few ‘small and intimate’ residences in Warsaw, classed as a luxury apartment building. The project, which is approaching completion, is situated in the Żoliborz district opposite the Stawi Kellera ponds. It will contain 11 residences costing between EUR 7,600 and 10,650 per sqm, which will sell on average for EUR 1,5 mln. What you get for your money is an architectural design in art deco style, and the luxury common parts made of high quality stone. Finishing elements such as forged iron balconies are works of real craftsmanship. However, sales are not going well. According to Piotr Puchała: “A luxury apartment is a product which is usually sold when ready for occupation. Since we started selling the Kolektorska investment a year ago, we have succeeded in getting only three residences of 80 to 150 sqm off our hands. But, I feel that sales will start moving when the whole investment is entirely ready, i.e. when it is entered on to the land and mortgage register.” This lack of take up explains why several apartments will be changed into service outlets, where legal chambers and other ‘exclusive’ units were to have been located. The Prestige company president, however, remains confident: “We will definitely be getting a much better return on this investment by turning some apartments into offices. We did not take this into our calculations when drawing up the marketing concept. At the moment we have converted two residences into offices.”

Top-class luxury homes may cost a lot to build, but the profits generated by their sales are even greater. According to Piotr Puchała, the price for constructing 1 sqm of a deluxe apartment varies between EUR 1,065 and 2,130, while the income from such an investment is in the millions. Unsurprisingly Prestige is now planning yet another apartment project. This is also to be in Warsaw – on ul. Drawska, where the developer is planning an even smaller building with 5 apartments – each of which will occupy an entire storey. The homes will be around 250 sqm in size, but no additional services will be provided, such as a concierge or maid, since the cost involved in employing such staff would be prohibitive. Construction work on this apartment building will start next spring.

Want to live in a palace?

If all you dream about is living in palatial splendour then no problem, Mermaid Properties have just what you are looking for: the Młodziejowski Palace on ul. Miodowa in Warsaw. This development contains 21 apartments, the largest of which measure 359 sqm, as well as a car park for 45 vehicles and two service outlets of 400 sqm each. The apartments will, of course, cost a fortune, with the price per square metre being around EUR 12,170, and for the largest residence the price will exceed EUR 4,26 mln! To more than a few, this is an astronomical sum. Łukasz Dołęga of Mermaid Properties, argues: “There is a group of people who, by definition, are looking for residences with a specific quality standard. The number of such customers is, naturally, restricted, which means the sales cycle for such a project may be relatively longer. But I must admit I am fascinated with the Młodziejowski Palace, since it is the only palace in Warsaw in which you can live.”

The company will soon be able to boast a number of other decidedly expensive apartments on ul. Jasna, inside a tenement building from the 1940s standing on the foundations of the pre-war Victoria hotel. This will contain 37 apartments, 52 parking spaces, a swimming pool, a jacuzzi, a fitness club and a 600 sqm cellar where the plan is to create a wine maturing facility for future tenants. Prices here will also be in the uppermost category: between EUR 7,600 and 9,130 per sqm. Łukasz Dołęga admits that: “Unfortunately, the cost of building 1 sqm of living space in our projects on ul. Jasna, and in the Młodziejowski Palace is clearly on the high side, which is reflected in the fact that the price of constructing one parking space in a historic building is EUR 30,400.”

Mermaid Properties is not the only company currently engaged in revitalizing old buildings. The Spanish-based Restaura also belongs to this group. The company is known for its Restaura Górskiego project, as well as a somewhat more recent scheme on ul. Piękna 44. Dom Development has similar plans: it has invested around EUR 30,4 mln in buying Edward Raczyński’s Warsaw tenement on pl. Małachowskiego, which will hold 56 apartments.

Price is not the only barrier that has to be overcome when purchasing an apartment. As one of my interlocutors admitted, he would never even think of selling an apartment to a controversial person such as Doda – the popular and over-sexed Polish singer. What is of fundamental importance when purchasing elegant, top-shelf apartments is that the residents must be offered the possibility of living peacefully among other equally prosperous people.

Show me the money and I’ll give you a dream home

Businessmen, football players and top managers are among the favourite customers for luxury residential schemes developed in Romania. For exquisite finishing, large areas and superb views, the price is between EUR 350,000 and more than EUR 1 mln.

Recently launched on the market, the Stejarii estate in Băneasa forest close to Bucharest has a market value of EUR 230 mln, with all 16 penthouses from the first phase of the project now reserved. The scheme was developed by Tiriac Imobiliare Company, which is controlled by ex-tennis player Ion Ţiriac. Prices for apartments in Stejarii range between EUR 340.000 and EUR 1.8 mln plus VAT. “We still don’t know just how big the demand is for luxury homes. That is, if we are defining luxury residences as being in a special location, near a park, lake, close to a forest, with superb finishing work, huge areas and substantial greenery,” says Simona Costache, general manager of real estate consultant Perfect Casa in Bucharest.

Foreigners lead the charge

According to Atisreal’s experts, an increasing demand has been registered from foreign individuals and multinational companies, which have been looking to purchase properties as an alternative to renting residential accommodation for employees. The rental market for high-end properties is still dominated by foreigners working in multinational companies, diplomatic missions and financial institutions which prefer to rent smaller apartments (for one-year leases) or larger villas (for longer agreements) selecting the accommodation according to the highest requirements – locations in the most prestigious neighbourhoods, spacious areas, designs and special fittings. 
   Customers that prefer to buy villas as an alternative to apartments in high-rise buildings are more interested in the quality of lifestyle, comfort, security, privacy, quality of natural environment, location, access and surroundings of the property, rather than the sale price. The record deal in this niche market was the sale of an 800 sqm villa on Lascar Catargiu Boulevard in Bucharest for EUR 5 mln.

Homes in the Emerald Residences estate in Bucharest cost close to EUR 500,000. One of the attractions provided by the developer Brooklyn Investments was a EUR 2 mln feng shui garden. “Buying this apartment was for me more than just a simple property transaction. It is a statement about my social status and my lifestyle,” explains one of the new tenants of the upscale compound.

High prices for special locations

The prices of luxury apartments and villas are usually subject only to small variations, with this segment being now the most stable in the residential market. Such properties are targeted by wealthy people, earning more than EUR 2,500 per month, aged 30-55, top executives or people that own their own businesses. The favourite areas for this segment are: Primaverii, Aviatorilor, Kisseleff, Dorobanti, Floreasca, Herastrau and Cotroceni, where the buildings are usually small, with a few apartments on the same floor and large areas inside (150-250 sqm).
 The budget necessary to purchase such an apartment varies between EUR 2,500 – 5,000 per sqm. For luxury properties, it is estimated that the prices will slightly increase in the following months with 5 pct to 10 pct, due to the growing number of customers interested in purchasing such properties (especially as an investment). “Usually they are buying these proper