Looking beyond the capital

At the 25th Annual Property Market Convention organised by Eurobuild on November 26th in Warsaw’s hotel Bristol, the question was posed of whether the regions are now trying to directly compete with the capital. The panel was moderated by Monika Sułdecka-Karaś, a partner at Knight Frank, who pointed out during her introductory presentation that 53 pct of Poland’s office space is in Warsaw. However, 880,000 sqm is under development in the regions, whereas 790,000 sqm is now under construction in the capital. “We only have operations in Łódź,” replied Anna Celichowska, the leasing director at Virako, when asked about the competition between the capital and the regions. “I don’t agree that the regions are competing with Warsaw. Regional cities, e.g. Łódź, are developing in this sector shorter than the capital city,” she added. “We started in Kraków,” said Sebastian Świstak, the director of the Warsaw branch of Cavatina. “Everywhere but Kraków is a region for us,” he added with a laugh. “And about lease agreements? The further from Warsaw, the shorter they are?” she asked Piotr Szafarz, head of the real estate practice at Dentons. “Not necessarily,” he answered. “It all depends on where the building is and its standard. The region is not important in this regard,” he explained.

The vacancy rate on the office property market is currently 9.1 pct in the regions and 8.2 pt in Warsaw. The moderator asked how thisaffects the willingness of banks to finance projects. Grzegorz Trawiński, the director of the real estate financing at Mbank, explained that everything depends on the city, what its prospects are and how liquid the market is. “We also pay attention to who the investor of the project is,” he said. “Even if we are dealing with a local investor, we must be sure that working with them will be profitable. We have a fairly uniform procedure when it comes to granting financing and we don’t do anything speculatively,” he added.