WBJ: What have you learned about the real estate industry over the last 1.5-2 years?

Dorota Wysokińska-Kuzdra: Despite all the challenges we have had with the pandemic, the real estate industry is in pretty good shape. However, two major sectors have been under huge pressure, and I mean here, of course, hospitality business with closed hotels canceled events and conferences as well as shopping centers that were closed to customers in most of the areas. We have also learned that work from home works well on a short-term basis, in the long term, without personal contacts, people lose their creativity and productivity, and it is almost not possible to teach younger employees through Teams or Zoom meetings. However, to be taken into account, after this experiment with working from home, it is very important to make sure that daily commuting is convenient. Here, the role of the city comes to play, to create such infrastructure and public transportation means, to make the commute safe and friendly. And interestingly, the majority of PRS transaction was done or initiated during the last 1.5-2 years. I would not say it is the influence of the pandemic, rather the right timing, but it was interesting to observe the shift of thinking towards the living sector by the majority of investors and this trend is across the whole of Europe.

Soren Rodian Olsen: While the pandemic has changed how we communicate, interact and assess real estate investment or leasing decisions, and we have seen a slowing in the Polish market for the first time in more than two decades, the underlying fundamentals of why investing in Poland have remained strong, and from a real estate perspective the bounce-back in Poland started sooner than in other, more mature markets. The real estate industry can be boiled down to three key essentials for success: people, access to data and information, as well as macroeconomic and microeconomic fundamentals. The rest is merely a matter of product availability. In Poland, we can pride ourselves on having a transparent real estate market, enabling access to data and facts, a wide source of competent talent in the real estate sector enabling deals and opportunities to happen, and ever-improving macro-economic fundamentals including infrastructure. It’s been a rough ride, especially during WFH lockdowns but I believe our market in Poland will emerge as a continuing strong one in CEE and in Europe.

How will this according to you influence Poland’s real estate market in the coming years? 

DWK: Poland’s real estate market will further develop. The huge supply gap in the broader residential market will increase the activity in this sector. However, not without challenges, which is the hunt for good plots and rising construction costs. There’s some discussion about how the new model of working/offices are and will be good asset classes to invest into. And of course, logistics, good as the gold of the real estate market, will further develop with the increasing development of e-commerce.

SRO: As hinted already, I think Poland’s position as an attractive real estate market will continue to grow stronger which is evidenced by a number of new entrants to the Polish real estate market during the past 24 months, in particular, from the Nordics and from other CEE countries.

Have you noticed/predicted changes in the investment appetite for and landscape of Poland?

DWK: Poland was and will remain a very attractive market for investors from all over the world. We will see an increasing number of investors from our neighboring countries, who will look for ways to increase their investment appetite outside of their home countries of Czechia, Slovakia, or Hungary. And there is still room for the Polish capital which is almost not present. Hopefully, works on REIT legislation in Poland will continue, as this is the best way for domestic capital to invest in the Polish real estate market on big projects, and not just purchase individual flats for investment purposes, which is a very common way to invest money today.

SRO: The most immediate and obvious change in the Polish real estate market has been following European and global trends. Investment appetite for retail and hospitality has slowed down substantially, a certain hesitance in the office sector (both leasing and investment activity), but an ever-growing appetite for logistics and living, where the latter is just an emerging asset class in Poland. I think we will continue to see substantial growth and capital inflows in the logistics sector and in a few years from now nearing a position similar to core markets in Europe. Living is just taking off but promises huge opportunity and potential boosted by new but very experienced investor/operators in the Polish market — definitely, a sector to observe. I strongly believe in the fundamentals of Polish retail in dominant/core locations and that retail will bounce back. Offices will prevail due to work culture in Poland (people really want to work in an office environment), and partially driven by the substantial BPO and SSC sectors

What is Poland’s real estate industry doing to contribute to Poland’s greener future?

DWK and SRO: Greener future is a must. For years already, developers have been taking care of implementing solutions to make buildings greener. But whatever was perceived as nice to have so far, is becoming a must now. Not only because of “PR pressure,” but without proper ESG policies, there will be difficulties to get attractive loans from banks, as lack of ESG will increase the financing costs, and sometimes may lead to loan rejection. Same for investors — they are obliged now to purchase buildings with clear ESG policy and implementation, so without taking care of ESG, developers will not be able to sell their buildings. So as pragmatic as it sounds, it’s good to have measures/tools which will lead to a better environment. 

How do you see ULI’s role in influencing and lobbying for a continuously strong development of Poland?

DWK and SRO: ULI as an organization is always promoting sustainable land development and educating the industry about best practices from the whole world. We always appreciate when our members come to us and ask for reference projects worldwide, which they want to show internally on the one hand. On the other hand, they are thankful to have us as a unique organization that is not promoting companies as such, but best practices, solutions, ideas being developed or implemented by its members. We provide a platform for ideas exchange and are very proud of our partners and members who share openly the knowledge and experience. ULI is its members — and this is what we always underline. Our aim is to strengthen this perception through the market and players who are still not our members. 

Urban Land Institute (ULI) is an international non-profit organization and research institute dedicated to shaping the future of the built environment for transformative impact in communities worldwide. ULI is a source for best practices and impartial information, and a forum in which real estate industry leaders can share ideas, experiences, and best practices. Urban Land Institute was founded in 1936 and has now over 45,000 members worldwide. More on Polish activities: poland.uli.org.

Dorota Wysokińska-Kuzdra, senior partner and head of corporate finance CEE at Colliers International, is the outgoing ULI Poland chair and member of the ULI Europe Executive Committee.

Soren Rodian Olsen, managing director of Logicenters in Poland at NREP, is the incoming ULI Poland chair.

soren rodian olsen
dorota wysokińska-kuzdra

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