Heitman builds future plans on first residential jaunt
The Chicago-based real estate investment firm last week sealed a joint venture with Engel General Developers Limited to create over 5000 residential units across Central Europe. It will invest via Heitman Central Europe Property Partners II (HCEPP II).
The project is a departure for the zł.835 million (€175 million) HCEPP II, which has previously shied away from residential opportunities because it was "looking for the right opportunity," explains Skip Schwartz, London-based senior vice president at Heitman. The closed fund had earmarked some of its capital for residential areas, but its local activities have only included commercial investments, such as in Warsaw Financial Center and Wisniowy Business Park. It was Engel's offer that persuaded Heitman to shift course.
The Haifa, Israel-based developer competitively marketed this zł.1.15 billion (€240 million) deal for seven sites across the Czech Republic, Hungary and Poland, Schwartz said. The firm has a proven track record with residential investments in Prague and Budapest - one of the main reasons that closed the deal for Schwartz and Heitman.
"We've seen a couple of opportunities before," Schwartz said. But they failed to fit the bill, especially for first-time Heitman investments in a country, he added. Other investments were either too small or costly, he said.
"In Engel we find a partner with a competitive program," he said. "And the fact that Poland was included in the program was important."
He cited the country's usual business attractions of size, growing economy and European Union membership. And, getting more specific, he described why the project with Engel is tailored to meet the country's future demand.
"The program's for up-and-coming workers," Schwartz said. And the for sale residencies to be erected in Warsaw are aimed at lower to middle-income Poles, he added.
Further future demand is clear, and Heitman is banking on a lucrative future for the country's residential space.
If Poland's gross domestic product grows as expected, Schwartz believes more and more workers - and new university graduates - will descend on the capital and seek affordable housing. The first phases of the development for projects are scheduled to be completed in 2005-06, a timeline that should dovetail with this rising demand.
On top of that, the country's mortgage market is expanding, which could improve the affordability of most Warsaw housing, he said.
The project is a departure for the zł.835 million (€175 million) HCEPP II, which has previously shied away from residential opportunities because it was "looking for the right opportunity," explains Skip Schwartz, London-based senior vice president at Heitman. The closed fund had earmarked some of its capital for residential areas, but its local activities have only included commercial investments, such as in Warsaw Financial Center and Wisniowy Business Park. It was Engel's offer that persuaded Heitman to shift course.
The Haifa, Israel-based developer competitively marketed this zł.1.15 billion (€240 million) deal for seven sites across the Czech Republic, Hungary and Poland, Schwartz said. The firm has a proven track record with residential investments in Prague and Budapest - one of the main reasons that closed the deal for Schwartz and Heitman.
"We've seen a couple of opportunities before," Schwartz said. But they failed to fit the bill, especially for first-time Heitman investments in a country, he added. Other investments were either too small or costly, he said.
"In Engel we find a partner with a competitive program," he said. "And the fact that Poland was included in the program was important."
He cited the country's usual business attractions of size, growing economy and European Union membership. And, getting more specific, he described why the project with Engel is tailored to meet the country's future demand.
"The program's for up-and-coming workers," Schwartz said. And the for sale residencies to be erected in Warsaw are aimed at lower to middle-income Poles, he added.
Further future demand is clear, and Heitman is banking on a lucrative future for the country's residential space.
If Poland's gross domestic product grows as expected, Schwartz believes more and more workers - and new university graduates - will descend on the capital and seek affordable housing. The first phases of the development for projects are scheduled to be completed in 2005-06, a timeline that should dovetail with this rising demand.
On top of that, the country's mortgage market is expanding, which could improve the affordability of most Warsaw housing, he said.
