On the waterfront

Waiting for the waterfront revolution in Warsaw. The neglected banks of the Vistula River are finally seeing more investment By Adam Zdrodowski Some of the most attractive, but hitherto neglected riverside areas of Warsaw are currently getting new investor attention, with a number of major public and private waterfront developments scheduled to be completed on the banks of the Vistula in the coming years. The municipal authorities are now developing new boulevards along the downtown stretch of the river close to the Old Town. In the opposite-lying Port Praski neighbourhood of the Praga Północ district, construction is proceeding apace on a huge mixed-use real estate project. More building activity can be expected in the near future, as the Polish capital is finally making up for years of bad urban planning and urban neglect. Unlike in many other large cities across Europe, riverfront areas in Warsaw have hardly been developed to date. Environmental factors have been playing a role here, but in the case of a number of unprotected areas it is thoroughfares and disused post-industrial sites that have effectively been separating urbanized neighborhoods from the Vistula. Real estate experts point to the paradox of the situation. While Warsaw has a very long waterfront, the city has practically turned its back on the river, said Mikołaj Martynuska, senior director, development consultancy, at CBRE. Admittedly, throughout much of modern history, the centrally located riverside neighborhoods of the Polish capital have been dominated by industry and inhabited by an impoverished population, which has prevented the waterfront from being properly developed. However, according to Martynuska, “there are very strong reasons for Warsaw to embrace the Vistula” and “the need for change is obvious.” Recent public investments including the boulevards and new public beaches are now attracting more and more citizens to the river. In the opinion of Martynuska, the lack of modern urban fabric at the riverside can be seen as an opportunity: it means that there are still great areas with room for substantial improvement and the creation of a “new Warsaw” along the Vistula and towards the interior of the city. [caption id="attachment_77015" align="alignleft" width="311"] Image: Filip Kwiatkowski[/caption] Municipal makeover Warsaw City Hall is now developing and planning a number of infrastructural projects on stretches of public land located along the Vistula which are designed to make the waterfront more attractive and draw more people to the riverside areas. The first phase of the flagship scheme of the municipal authorities – the Vistula boulevards – was completed earlier this year and involved the renovation of the part of the waterfront which stretches from the Śląsko-Dąbrowski Bridge up to the Gdański Bridge. A general contractor for the second phase of the development, which will involve the modernization of the part of the waterfront that stretches between the Śląsko-Dąbrowski Bridge and the Świętokrzyski Bridge, should be selected soon. The modernization of the other parts of the boulevards, lying south of the Świętokrzyski Bridge, is now being planned, with an architectural competition scheduled to be announced later this year, said Marek Piwowarski, the Warsaw City Hall plenipotentiary for the Vistula River. Many other public investments in the riverside areas of Warsaw are in the pipeline. Piwowarski mentioned the planned projects located in the Port Czerniakowski area of downtown Warsaw which will include a new marina. Another marina is already being developed in the Młociny neighborhood of the Bielany district in the north of the city. Besides this, Warsaw City Hall is developing new pedestrian paths and bicycle lanes along the Vistula, as well as planning a floating swimming pool on the river. Asked whether Warsaw City Hall sees room for private investments near the boulevards, Piwowarski mentioned large roofed premises that are envisioned for the Świętokrzyski Bridge area which will house cultural, education and service functions. “This is potentially one of the most attractive urban areas [in Warsaw] and the most interesting investment on the Warsaw waterfront,” Piwowarski said. He added that there is room for public-private partnership but the decision in this regard has yet to be made. [caption id="attachment_77019" align="alignright" width="355"] Image:The Tides Property Group[/caption] Developer interest Meanwhile, renewed public interest in the Vistula and the recent municipal projects on the riverfront are expected to attract more private capital to the riverside areas. Construction on the first office and residential schemes located very close to the river are currently underway. Tides Property Group is now developing an office investment, called The Tides, on the left bank of the Vistula, which will be the first office project in Warsaw offering direct access to the river. The development will deliver almost 13,000 sqm of A+-class space in Q1 next year. Slightly north of The Tides and across the Vistula, Port Praski is developing the first residential phases of an eponymous, mixed-use scheme which will comprise a total of approximately one million sqm of usable housing and commercial space upon completion. Another large-scale development is being envisioned for over 27 hectares of post-industrial land located along the Vistula in the northern part of the Praga Północ district. Mennica Polska plans to build a total of around 270,000 sqm of residential and commercial space on the plot. According to Mateusz Polkowski, associate director, research and consulting, at JLL, the trend will undoubtedly develop in the coming years, with Warsaw already following in the footsteps of other European cities, such as Berlin, and “getting closer to” its river. While The Tides is currently the only office project under construction located directly on the banks of the Vistula, both residential and commercial space developers will be interested in the development of new waterfront schemes in the Polish capital in the near future, he said. Polkowski pointed out that new waterfront developments have recently been delivered or are now in the pipeline in some of the major regional markets in Poland, including the Tri-City where many post-industrial sites that used to house shipyard facilities offer direct access to water. Developer Vastint, for one, has already completed the first phase of its Gdynia Waterfront office and hotel investment in Gdynia. In Wrocław, developer Nacarat delivered an office project earlier this year called Dubois 41 which is located on the bank of the Oder River. [caption id="attachment_77020" align="alignleft" width="289"] Image:PZ Studio[/caption] Difficult investments In the opinion of Emil Domeracki, senior associate, investment services/land, at Colliers International, in Warsaw there are also sites which, when developed, would undoubtedly contribute to the creation of a proper waterfront. “The Żoliborz stretch of the Vistula is worth attention,” Domeracki said. He added that the premises of the Spójnia sports club in that district could potentially house a project combining retail, residential, office and sports functions, and offer direct access to the river. Why is it taking so long to revitalize neglected riverside areas? According to Domeracki, drawing up proper zoning plans and coming up with a formula for the cooperation between the city and potential investors has been a major challenge. Besides, waterfront developments tend to be difficult investments because of all kinds of technical and legal problems. “The city should be getting closer to the Vistula, but one cannot forget about ecology and sustainable development,” Domeracki said. Piotr Capiga, a negotiator in the office department of Cushman & Wakefield, argued that office developers have until recently not been willing to take additional risks and invest in projects in non-standard locations such as riverside areas. Additionally, the changing water levels and the threat of flooding still remain a challenge. While modern technology allows investors to minimize  risks, the need to provide anti-flood protection makes riverfront schemes significantly more expensive. Nevertheless, according to Capiga, recent changes on the office property market, which have resulted in a shift in the balance of power in favor of tenants, have encouraged developers to look at new, less obvious locations which means that they may also start considering waterfront projects. In the opinion of Capiga, much will depend on the successful commercialization of The Tides. “If the investment proves to be popular with tenants, we can expect more investments along the Vistula,” Capiga said. Brownfields first According to Martynuska, it is extremely important how the process of developing the waterfront in Warsaw is managed. “It is crucial for the city to drive development hand in hand with investors and landowners,” he said. “The interest of the investment market is clear, but money should be channeled wisely,” Martynuska added. In his opinion, it is the development of brownfield areas such as Port Praski and Mennica Polska sites that should be seen as the priority. On the one hand, the development of the sites will create value for the city as industry is no longer needed within the city borders. On the other hand, only the commercial development of the sites can make their transformation financially viable, Martynuska said. Martynuska added that greenfield waterfront sites should, for the time being, be left alone. “There will always be time to intensify development over there, but now the flow of funds should rather be directed towards brownfield developments,” he said.