Development goes into two-way system
"I think there will be a trend for the near future that multinationals fed up with high rent levels will build their own buildings," said Chris Grzesik, head of Price Waterhouse Nieruchomosci (Real Estate).
This could happen in two ways: tenants would act as developer in building their own headquarters, or would commit themselves to substantially longer leases in return for lower rents.
Grzesik said that PW is currently working on three projects which could take the latter route. They are projects that have been around for some time, but had trouble securing financing, one of the biggest detriments to property development after finding land with clear title.
Deals currently being negotiated could change all that, Grzesik said. With contracts at speculatively leased buildings running at only three to five years, potential investors are frightened off by what could happen once these contracts expire and property managers begin to look for tenants to take their place.
In the deals currently being negotiated, tenants have approached developers with offers to sign 10-year lease contracts in return for lower rents of around $35 per square meter. While this decreases yields substantially, it at least gives the investors the assurance that they won't be left holding an empty building once initial contracts expire.
Another option for tenants would be build to suit. Evidence of this would be the two big property deals recently completed at Plac Trzech Krzyzy and Plac Teatralny.
The Holland Park scheme at Plac Trzech Krzyzy is being developed by Maatschappij voor Bedrijfsobjecten (MBO), the property division of the ING Group, which won a tender for the land last year. The main tenants are ING Bank, ING's insurance arm Nationale Nederlanden and Bank Alaski (where ING has a 25% stake). While tenants will still lease their space in the building, MBO's Jaap Joldersma said rents will be set lower than those charged at other speculative projects.
A key to finalizing the Plac Teatralny project was the fact that Citibank has agreed to buy one of the buildings from project-initiator Bouygues. The latter is currently negotiating with other banks which may be interested in buying the other half of the project. Citibank is also planning to lease some of the space in the building that they have purchased.
Another area the city officials would like to see developed is Plac Europy, at the intersection of ul. Sobieskiego and Al. Sikorskiego. The first contract for construction at the site was signed early in June by the Capital Energy Company (Stoleczny Zaklad Energetyczny SA) which is planning to build the Stegny Power Station along with the energy company's headquarters.
Other companies have shown interest in the location, like ITI, Autopol Service, Pol-Oil, and Neste, but as Karolina Kaim of Jones Lang Wootton points out, they are almost all end users looking to build their own buildings.
Sejm rejects president's restitution bill
The Parliament has turned down two restitution bills proposed by President Lech Walesa that called for restitution of property in kind. They also gave their initial approval to the government supported project that would only compensate owners whose property was taken in violation of nationalization decrees. Compensation would be in the form of bonds, which could be used to buy property offered by the state treasury or shares in companies being privatized.
H&B join Fredry
Healey & Baker have been taken on board to lease the building located on ul. Fredry by the Teatr Wielki. The building is currently undergoing refurbishment following months of delays caused by a dispute with the Historical Landmark office. Also on the project is U.S. Realty Advisors, headed by Marc Bushala.
ING in LIM
ING Bank has taken 1,000 square meters on the eighth floor of the LIM center. They had planned to expand within the Warsaw Corporate Center by taking over space from Price Waterhouse, which was planning to move out and into the FIM Tower. Delays that stalled the project early in the year, however, led PW to reconsider. The advantage of the LIM Center, said ING Operations Manager Dennis Oppenshaw, was the location and the fact that WCC and LIM use the same phone switching system.
This could happen in two ways: tenants would act as developer in building their own headquarters, or would commit themselves to substantially longer leases in return for lower rents.
Grzesik said that PW is currently working on three projects which could take the latter route. They are projects that have been around for some time, but had trouble securing financing, one of the biggest detriments to property development after finding land with clear title.
Deals currently being negotiated could change all that, Grzesik said. With contracts at speculatively leased buildings running at only three to five years, potential investors are frightened off by what could happen once these contracts expire and property managers begin to look for tenants to take their place.
In the deals currently being negotiated, tenants have approached developers with offers to sign 10-year lease contracts in return for lower rents of around $35 per square meter. While this decreases yields substantially, it at least gives the investors the assurance that they won't be left holding an empty building once initial contracts expire.
Another option for tenants would be build to suit. Evidence of this would be the two big property deals recently completed at Plac Trzech Krzyzy and Plac Teatralny.
The Holland Park scheme at Plac Trzech Krzyzy is being developed by Maatschappij voor Bedrijfsobjecten (MBO), the property division of the ING Group, which won a tender for the land last year. The main tenants are ING Bank, ING's insurance arm Nationale Nederlanden and Bank Alaski (where ING has a 25% stake). While tenants will still lease their space in the building, MBO's Jaap Joldersma said rents will be set lower than those charged at other speculative projects.
A key to finalizing the Plac Teatralny project was the fact that Citibank has agreed to buy one of the buildings from project-initiator Bouygues. The latter is currently negotiating with other banks which may be interested in buying the other half of the project. Citibank is also planning to lease some of the space in the building that they have purchased.
Another area the city officials would like to see developed is Plac Europy, at the intersection of ul. Sobieskiego and Al. Sikorskiego. The first contract for construction at the site was signed early in June by the Capital Energy Company (Stoleczny Zaklad Energetyczny SA) which is planning to build the Stegny Power Station along with the energy company's headquarters.
Other companies have shown interest in the location, like ITI, Autopol Service, Pol-Oil, and Neste, but as Karolina Kaim of Jones Lang Wootton points out, they are almost all end users looking to build their own buildings.
Sejm rejects president's restitution bill
The Parliament has turned down two restitution bills proposed by President Lech Walesa that called for restitution of property in kind. They also gave their initial approval to the government supported project that would only compensate owners whose property was taken in violation of nationalization decrees. Compensation would be in the form of bonds, which could be used to buy property offered by the state treasury or shares in companies being privatized.
H&B join Fredry
Healey & Baker have been taken on board to lease the building located on ul. Fredry by the Teatr Wielki. The building is currently undergoing refurbishment following months of delays caused by a dispute with the Historical Landmark office. Also on the project is U.S. Realty Advisors, headed by Marc Bushala.
ING in LIM
ING Bank has taken 1,000 square meters on the eighth floor of the LIM center. They had planned to expand within the Warsaw Corporate Center by taking over space from Price Waterhouse, which was planning to move out and into the FIM Tower. Delays that stalled the project early in the year, however, led PW to reconsider. The advantage of the LIM Center, said ING Operations Manager Dennis Oppenshaw, was the location and the fact that WCC and LIM use the same phone switching system.
