Homes for the holidays
Since 2005, Poland's property prices have been rising and what had been a big-city boom is now spilling over into real-estate markets in smaller cities and towns that are part of Poland's broad tourism network. As salaries rise, a growing number of Poles can afford to spend more on leisure travel or even purchase a second home in Poland's wide variety of vacation destinations, where a wealth of opportunities remains largely undiscovered.
"The market was neglected for some time and hardly even existed. Now a number of specialized firms are entering the market, broadening their offer with upscale apartments and homes, as well as hotels or comprehensive up-to-date facilities, such as conference-hotels or spa-hotels," says Mikołaj Martynuska, residential director at CB Richard Ellis (CBRE) Poland. "The most promising areas of Poland are the [mountainous] Podhale voivodship in the south, the Mazury [lake district] region in central Poland and the Baltic seaside - all the way down through Hel to Świnoujście in the east," adds Martynuska.
Beach party
Prices on the coast vary from about zł.4,000 per sqm in smaller cities like Darłowo, to up to zł.20,000 per sqm in Sopot and in towns along the Hel Peninsula, such as Jurata, as available land for development becomes scarce. Hel has long been an established vacation destination - the President and Prime Minister have summered here for decades - nestled between the Baltic Sea on one side and the Bay of Gdańsk on the other, and boosting a beautiful natural landscape, fully developed infrastructure and upmarket hotels, spas and resorts, like the historic Bryza hotel - a fixture on Jurata's ritzy property landscape.
Jacek Twardowski, sales director of Kristensen Group, finds that prices in the most popular seaside resorts can vary from zł.10,000 to zł.14,000 per sqm and agrees that prices in Sopot, Jurata and Międzyzdroje can reach up to zł.20,000 per sqm. "However, the average price in Świnoujście or Kołobrzeg is currently at zł.6,000, although prices could rise to zł.12,000 per sqm for beachfront locations."
Kristensen Group is the developer responsible for the recently completed Baltic Park Promenade, one of the most prominent multi-use sites in the area. The complex features five buildings of apartments and shops in a group of Mediterranean-style villas. The company is now investing close to zł.25 million in the development of the next phase of the Baltic Park development, Baltic Park Plaża, which will comprise seven luxury apartment buildings on the dunes right along the beach.
Baltic bucks
"Świnoujście is a particularly wonderful town on an island with the widest beach on the coast, clean white sand, an unbelievable range of native plant life, a number of lakes, a marina, a lively downtown area and, of course, the Baltic Park Promenade," explains Twardowski. "The views from Baltic Park Promenade and Plaża are unbeatable," he adds. Baltic Park Plaża will offer a total of 78 luxury apartments of between 40 sqm and 123 sqm - a quarter of which will be two-storey penthouses - with terraces of up to 80 sqm. The Danish developer plans to complete construction of the first three buildings by the end of April next year.
Kristensen Group has plans in store for a five-star, 13-storey hotel within the same complex, with a sleek architectural design based on the shape of a sail. It will also build a recreational pier, complete with restaurants, cafes, beauty salons and boutiques and recreational facilities, connected to all three phases of the Baltic Park project. Twardowski reports that apartments for the first phase of the project sold out in record time, and the company expects a similar degree of interest for the next phase of apartments, which are priced between zł.360,000 and zł.1.5 million.
As for less popular towns along the coast, Dorota Tobiasz, investment director at CEE Property Group, sees many areas having significant potential for development, such as Mielno, which is considered the least polluted town on the coast. "Some interesting property investments, particularly in the short term, could be located in smaller cities and resorts, such as Darłowo, Krynica Morska and Mielno, which have not seen much development in recent years and have potential for value growth," remarks Tobiasz. Twardowski cites prices of no more than zł.4,000 per sqm for Darłowo or Mielno. Prices could soon rise in these areas as attractive properties are developed - Darłowo already has a four-star hotel in the pipeline.
Off the beach-ed path
The seaside isn't the only place to look for investment, as there are several promising areas in the mountain regions of Poland and Warmia-Mazury, which are not as well known as the seaside towns, but are equally promising in terms of development. In Mazury, known as the "great lakes" region and the yachting capital of Poland, there are a number of apartment developments in cities like Węgorzowo, where prices per sqm range from 4,000-9,000 sqm, or in Mikołajki, which already boasts extensive hotel and recreation infrastructure and where property prices reach zł.10,000 per sqm.
In Zakopane, the best-known mountain resort in Poland, new projects are pushing the zł.12,000-per-sqm mark, catching up to its neighbour Kraków, Poland's tourism capital. More affordable investment opportunities can be found in towns like Wisła or Krynica Zdrój, where the annual Economic Forum is held each year.
"The most basic observation for these areas is the need for improved infrastructure on the part of local governments in order to make the areas more attractive and more amenable to tourists," says CBRE's Martynuska. "This is slowly shifting as services are improved on both the basic level - from roads, landscaping, restaurants and shopping, to the more complex level such as upscale dining, recreational and wellness facilities. Improvement of airport, road and rail infrastructure is also vital to the development of the Polish tourism industry," he adds.
Higher standards
Upgraded standards for design and outfitting are also a primary element of successful property development for increasingly sophisticated buyers. "Currently, many resort cities and towns lack apartments that are of a high standard of design and comfort. The market for such properties is viable, particularly with regard to additional amenities, such as spa and wellness facilities on site," says CEE Property Group's Tobiasz.
According to Twardowski, apartments in Baltic Park Plaża are intended for full-time residents, however such properties can prove a valuable investment for seasonal leases. Experts from the CEE Property Group find that the development and promotion of the tourism industry in Poland has the potential to bring in significant returns for homeowners leasing out their properties. These investments will be made both by Poles and foreign investors drawn in by the lucrative prospects of such a market, particularly with regard to "apart-hotels," which are apartments located within properties that offer hotel-type services for residents or renters. Kołobrzeg, a town on the coast, is already seeing the development of eight such projects, such as Zielone Tarasy and Apartamenty Arka Mega, at prices of zł.6,000 and zł.12,000 per sqm, respectively.
Room for improvement
As for the traditional hotel market, the overall dynamic growth of the sector is rubbing off on the vaction market, particularly as many older hotels and inns are closed down and replaced by developers entering the market with high-standard offers. "There are a great deal of hotel-spa sites in the pipeline throughout the country, particularly in Międzyzdroje, Kołobrzeg and Mazury, along with several hotel-golf-spa resorts outside of Poland's biggest cities: Kraków, Wrocław and Warsaw," says Alex Kloszewski, head of Colliers' hotel department.
"Many hotels need at least six months of operation to break even, which can be supported by conference services in off-peak months," says Martynuska. Kołobrzeg is one town where the tourist season runs all year long, however many other cities and towns can benefit from taking advantage of business travelers for events, meetings and conferences.
According to CEE Property Group analysts, the property market in popular tourist destinations will continue to grow over the next five years, entailing increases in property values several-fold. They report a number of German, Russian, English and Irish investors buying up some of the most attractive properties. Nonetheless, experts do emphasize that this market is more susceptible to fluctuations in price than the traditional property market. "It must be noted that in the event of a cooldown in the economy, this market is signficantly more threatened by falling prices," says Paweł Grzàbka, a member of the board at CEE Property Group.
