Capital thinking
The real-estate investment turnover in Poland has increased tenfold in only five years. According to Jones Lang LaSalle (JLLS), in 2005 turnover topped EUR 2.5 (zł.9.95) billion, and is on target to exceed this in 2006. King Sturge says that by the end of August 2006, the value exceeded EUR 3.2 (zł.12.7) billion.
With over 50 percent of deals in Warsaw, the city is the CEE market leader and together with Poznań, Łódź, Wrocław and Kraków, Warsaw is expected to be one of the fastest growing cities in Europe. Poland's economic growth rate is forecast at more than five percent, and Warsaw is expected to double this, which puts it on a par with the world's star urban performers in Asia.
"The city's real-estate market is now in an enviable position of showing the characteristics of a western European market (in terms of depth and transparency), but benefiting from strong economic growth prospects, more typical of transition economies," says Jeremy Kelly from JLLS.
On the up
Warsaw is firmly established among the leading business centers in CEE. Cushman & Wakefield's recent report, European Cities Monitor, says that Warsaw can expect the largest influx of international companies over the next five years, with 50 of 507 sampled companies expected to locate in the city. In the ranking the city takes second position in the CEE region, with Prague taking the top spot.
Experts say the city has experienced a remarkable physical transformation over the past 15 years. Residential stock has been considerably improved, reinforced by the high level of new developments, and complemented by significant commercial development - two million sqm of offices and one million sqm of shopping centers have been built in the past decade.
Messy planning
However, these new developments have actually been built without a far-reaching strategy. Spatial-development plans are a common tool to control development. Currently only 20 percent of the city's territory is master planned. "In its pursuit of the market economy, master planning appears to have taken a rear seat in Warsaw. There is a notable lack in the city core, in the vicinity of the Palace of Culture - which has resulted in a combination of both empty lots and congestion. It is significant that one of Europe's prime locations has been without a major vision for so long," says Kelly.
"he close neighborhood of the Palace of Culture and Science should be carefully planned; so the city should force coherent vision of construction height, design and materials used. I'm afraid that KDT might not fit this area," says King Sturge's Dominik Witkiewicz. He shares Kelly's opinion that the city lacks architectural cohesion. "The result is that some of the skyscrapers were built in the most inappropriate places without a concept of linking them with the city's buildings," he adds.
Warsaw is developing its own skyline; the city seems similar to many Asian cities in its use of large commercial development to define its urban form. In Europe the emphasis is not so much on skylines as on architectural merit. Karina Kreja from JLLS says that Warsaw actually links the two trends - although buildings are high, designs are improving. "For foreign visitors, the image of Warsaw proves its vitality and business background. Compared to other cities in the CEE region, Warsaw shows its economic potential in that way," says Kreja.
Transferring the responsibility
Witkiewicz returns to the lack of master planning, saying that sometimes developers think they can build anything once they own a plot. However, it very often happens that in Warsaw, in this planning void, the commercial real-estate sector has taken over some of the responsibilities usually attributed to city authorities by creating a new generation of public spaces.
"In the absence of planning, the real-estate sector has received an unusual opportunity to reshape the cityscape. That provides enormous potential, but also adds an additional responsibility on developers over the longer term to create a viable living and working city for its citizens," says JLLS' Kelly. Areas such as the fountain in the center of the Metropolitan building on Plac Piłsudskiego are now popular public meeting points in the city.
Letting the space
Developers complain that there are many empty plots all over Warsaw on which they cannot build, but there is some good news. Recently Telekomunikacja Polska announced that it wants to sell 31 of its properties all over Poland, nine of which are excellent locations for residential developments in Warsaw and a couple of the other large cities.
CB Richard Ellis, Cushman and EC Harris, as well as Vertano, are currently looking for international investors for properties owned by Polish National Railways (PKP). Similarly, Colliers International is helping the Military Property Agency (AMW). Michał Wrzosek, a spokesperson for PKP, says that within the city of Warsaw there are some 70 ha that can now be developed. "Some 15 hectares in Warsaw's Odolany is designated for residential buildings. There is another area located close to Warszawa Wschodnia station. Negotiations with PKO Inwestycje are in progress. In two to three years, construction works should be launched," says Wrzosek.
Manly decision
But Warsaw still has much to do. According to JLLS's Kelly, despite being the national leader, Warsaw scores poorly in international comparisons when indicators such as R&D infrastructure are considered. Such infrastructure is essential for a high-order economy. "As a result Warsaw will need to work hard to compete with the emerging technology clusters, such as one forming in Centropa around Budapest, Prague and Vienna, or the one embracing the Nordic and Baltic countries," says Kelly.
