By the book
The retail and leisure and residential sectors have benefited particularly from their input and they seem set to continue their presence in this country for some time yet.
The Ronson Development Group is a hybrid collection of companies based in Tel Aviv but active across Europe in countries such as Ireland, the Netherlands and Poland. Its branches include the construction arm U. Dori Engineering Works Corporation Ltd, which has participated in major infrastructure projects in places such as Romania, for example, and the cinema developer Israel Theaters Ltd whose Cinema City brand dominates that market in Poland. It also has a residential subsidiary here in this country, Ronson Development, which has already built the Słoneczny Skwer complex of apartments in Warsaw's Ochota district. With another five new projects planned for the city over the short- to medium-term including two within a year, Lokale spoke to the firm's General Director, Dror Dory Kerem, about his views on the market here.
Do you feel that the residential market in this city is accelerating at some rate at the moment?
I think yes but the word 'accelerating' perhaps suggests too much pace for what is happening right now. There is certainly demand for apartments and there will be for quite some time. This is being fuelled by one or two macroeconomic factors and the increasing willingness of banks to lend people money; thankfully, there is a relatively safe structure in Poland for banks to do this now. People in this country want to live a bit more luxuriously these days, though standards are still relatively inferior compared to those in other parts of Europe, but that will all improve with time. If you look at Poland as a whole, you'll see that there will be plenty of work for us for the next 20 years and it is a fair enough assumption that this will eventually be the market for residential. Whether you are going to be successful or not as a developer depends of course on how well you do the job.
So how do you do it right?
Every company has its own approach and we have decided to focus on the quality of the product. I know everyone would claim this but I think it is evident that we are focusing on a very particular market niche. We don't work with second-rate general contractors, for example, and believe that we should provide a product that will last for some time, and if there is a problem you need to be able to go to responsible professionals who are going to be there for you; this is a matter I can't play around with. Our attitude, I believe, indicates the seriousness of what we do. When I do an analysis for products that I'm going to use, I always try to remain at least an inch above the competition.
How do you see the concept that you offer your customers developing and evolving?
When someone buys an apartment today he/she needs to feel that he/she is making an investment. When I originally arrived in this country, I lived in a new building, but if you looked at this today, you wouldn't want to live there. The quality, the type of design - many things - make this building, despite its central location, an undesirable place to live. For us the main purpose is to make people understand that they are making an investment and not just a purchase; the idea is that we don't just sell space but a 'neighborhood'. We have a project under development right now and the building permit allows me to go up to eight storeys, but it won't go that high - there will only be four. There is an eight storey building next to it where all the apartments have been sold, so it's not as if I think I wouldn't be able to sell that height of building. There are a variety of factors which make it reasonable for me to go ahead and build small. And by providing better quality we attract these types of customers [who want an investment and not just a purchase]. We are not going into territories where we sell for $6,000 per square meter: they don't appeal to us and if I cannot provide proper quality, I'll have to come back five years later and repair all the problems that have occurred since completion of the project.
Do you have a policy on how high your buildings are?
No, it depends on the location. There are 12 floors at Sloneczny Skwer and we have a permit for another project which will have 14 stories in Wyśćigi, overlooking the park, so going high over there is not a minus, it's a plus. But we are also creating a smaller, less intensive neighborhood in Bemowo. There is no set policy.
Other residential developers say that the procedures involved in acquiring building permits in Warsaw are a nightmare. What are your feelings on this subject?
It's a horrifying experience. I represent a group that brings capital over here, directly employs a good number of people, and indirectly even more, and I think that I should be encouraged to bring more money to develop more properties, though not, of course, at the expense of taking advantage of the city or harming the environment. I don't rub shoulders with any politicians - I just do it by the book, which is sometimes difficult. Some people may enjoy more support because they can work the system, but I don't do that. I believe that we put together projects that are good for the city and we are very conscientious about how we build, so I think the system here in Poland needs to work a little bit more smoothly. I'm not asking to be allowed to build as many buildings as I like, but sometimes we're faced with a lot of difficulties when we're just trying to do our jobs.
What would you say are the biggest obstacles you have to overcome in Poland?
Two things are crucial. The first is finding the right land, and unfortunately it's not an easy process. This is often because the people who own land overestimate what they have, are not professional and think that they can get an amount per square meter that is just not realistic. The other is just getting building permission. Sometimes the process may take one year but there are occasions when you have to wait as long as three years. If I want to make an investment of millions of zloty and it just sits there for three years, that's a very big problem. Once you overcome these hurdles, however, things go a lot more smoothly because things are within your control.
The Ronson Development Group is a hybrid collection of companies based in Tel Aviv but active across Europe in countries such as Ireland, the Netherlands and Poland. Its branches include the construction arm U. Dori Engineering Works Corporation Ltd, which has participated in major infrastructure projects in places such as Romania, for example, and the cinema developer Israel Theaters Ltd whose Cinema City brand dominates that market in Poland. It also has a residential subsidiary here in this country, Ronson Development, which has already built the Słoneczny Skwer complex of apartments in Warsaw's Ochota district. With another five new projects planned for the city over the short- to medium-term including two within a year, Lokale spoke to the firm's General Director, Dror Dory Kerem, about his views on the market here.
Do you feel that the residential market in this city is accelerating at some rate at the moment?
I think yes but the word 'accelerating' perhaps suggests too much pace for what is happening right now. There is certainly demand for apartments and there will be for quite some time. This is being fuelled by one or two macroeconomic factors and the increasing willingness of banks to lend people money; thankfully, there is a relatively safe structure in Poland for banks to do this now. People in this country want to live a bit more luxuriously these days, though standards are still relatively inferior compared to those in other parts of Europe, but that will all improve with time. If you look at Poland as a whole, you'll see that there will be plenty of work for us for the next 20 years and it is a fair enough assumption that this will eventually be the market for residential. Whether you are going to be successful or not as a developer depends of course on how well you do the job.
So how do you do it right?
Every company has its own approach and we have decided to focus on the quality of the product. I know everyone would claim this but I think it is evident that we are focusing on a very particular market niche. We don't work with second-rate general contractors, for example, and believe that we should provide a product that will last for some time, and if there is a problem you need to be able to go to responsible professionals who are going to be there for you; this is a matter I can't play around with. Our attitude, I believe, indicates the seriousness of what we do. When I do an analysis for products that I'm going to use, I always try to remain at least an inch above the competition.
How do you see the concept that you offer your customers developing and evolving?
When someone buys an apartment today he/she needs to feel that he/she is making an investment. When I originally arrived in this country, I lived in a new building, but if you looked at this today, you wouldn't want to live there. The quality, the type of design - many things - make this building, despite its central location, an undesirable place to live. For us the main purpose is to make people understand that they are making an investment and not just a purchase; the idea is that we don't just sell space but a 'neighborhood'. We have a project under development right now and the building permit allows me to go up to eight storeys, but it won't go that high - there will only be four. There is an eight storey building next to it where all the apartments have been sold, so it's not as if I think I wouldn't be able to sell that height of building. There are a variety of factors which make it reasonable for me to go ahead and build small. And by providing better quality we attract these types of customers [who want an investment and not just a purchase]. We are not going into territories where we sell for $6,000 per square meter: they don't appeal to us and if I cannot provide proper quality, I'll have to come back five years later and repair all the problems that have occurred since completion of the project.
Do you have a policy on how high your buildings are?
No, it depends on the location. There are 12 floors at Sloneczny Skwer and we have a permit for another project which will have 14 stories in Wyśćigi, overlooking the park, so going high over there is not a minus, it's a plus. But we are also creating a smaller, less intensive neighborhood in Bemowo. There is no set policy.
Other residential developers say that the procedures involved in acquiring building permits in Warsaw are a nightmare. What are your feelings on this subject?
It's a horrifying experience. I represent a group that brings capital over here, directly employs a good number of people, and indirectly even more, and I think that I should be encouraged to bring more money to develop more properties, though not, of course, at the expense of taking advantage of the city or harming the environment. I don't rub shoulders with any politicians - I just do it by the book, which is sometimes difficult. Some people may enjoy more support because they can work the system, but I don't do that. I believe that we put together projects that are good for the city and we are very conscientious about how we build, so I think the system here in Poland needs to work a little bit more smoothly. I'm not asking to be allowed to build as many buildings as I like, but sometimes we're faced with a lot of difficulties when we're just trying to do our jobs.
What would you say are the biggest obstacles you have to overcome in Poland?
Two things are crucial. The first is finding the right land, and unfortunately it's not an easy process. This is often because the people who own land overestimate what they have, are not professional and think that they can get an amount per square meter that is just not realistic. The other is just getting building permission. Sometimes the process may take one year but there are occasions when you have to wait as long as three years. If I want to make an investment of millions of zloty and it just sits there for three years, that's a very big problem. Once you overcome these hurdles, however, things go a lot more smoothly because things are within your control.
