Developer's a dirty word

The president of Reescon, Andrzej Ciechulski, says that around 1,500 hectares of land is not on the market as owners are hanging on to it until the price of land peaks. His idea is to reach those owners, find out what price they expect for the ground, and double it.

If the owner agrees, a company will be set up, which prepares a business plan for the investment and looks for a bank to finance the venture. In this process, Ciechulski sees no place for a developer, claiming that the cost of his service adds up to the cost that the client has to bear.

Reescon, which does not want to be called a developer, said that by minimizing construction costs, and by using cheaper building materials, it will be able to build flats 20 percent cheaper than those built using the more traditional methods.

However, the company's biggest investment, which was developed in the Warsaw quarter of Mokotów, doesn't back up their argument. The prices of flats in the Na Skarpie development vary from zł.4,800 to zł.5,600 per sqm.

Ciechulski says that Reescon's new system doesn't apply to this investment: "When we were starting this project we had a limited influence on the owner of the ground. We also did not have a position on the market. Today we have a better investment position."

The land for the Na Skarpie development constituted 20 percent of the total investment cost, which amounted to some zł.100 million. Located on ul. Bukowińska in Warsaw, the complex's utilization space is 22,400 sqm. The project is scheduled for completion in autumn 2007. The object has two underground garage levels with 283 parking lots. The ground floor will be designated for commercial service. The 14-storey residential part will have three staircases and four to eight flats per floor. The flats will be completed in the Warsaw standard.

The company plans to release several thousands flats to the market. It also wants to invest in ecological villages in Warsaw.