Polish developer prepares next step for nascent retail sector
Next year the developers plan to start construction on the next phase, a 38,000 square-meter shopping mall, the largest in Poland.
The developer of the project is Jaros*aw Skowronski, known for the program he produced in 1989-1990 for Telewizja Polska entitled "PrzedsiebiorczocT" (Entreprenuership), a show meant to educate Poles about how small business works.
"I've heard hundreds of stories of people who sold everything they had so they could start up their own shop," Skowronski said. "They wanted to work for themselves."
In the early 1990s Poland saw the outbreak of this small-business fever in the form of streetside sellers and later the creation of the bazaars. Now Skowronski said it's time to move to the next stage: bringing these small shop owners out of the mud and into a modest but efficient environment.
"I felt it was high time to change the face of trade in Poland," Skowronski said. "In the beginning of the free-market changes, the most important thing was price. Now people want to be able to park their car, and shop around with dry shoes."
While the developer is the same for both buildings, the investors are different. The first building, which is expected to cost approximately z*. 10 million ($4.3 million) will be funded by a number of private Polish individuals. Construction of the larger shopping mall will cost around z*. 70 million ($30 million) and will be financed by Polish supermarket chain Bestopol, and Marek Mikuckiewicz, owner of MarcPol.
The amount investors will pay for the shopping complexes will depend on how the leasing goes. A large part of the project is financed by a down-payment in the amount of z*. 2,500 ($1,075) per square meter, meaning that if the building were fully pre-leased, tenants would pay for more than it costs to construct the building. All lease agreements are for five years, with tenants paying z*. 60 per square meter ($25) for the life of the contract.
VAT hops, not jumps
After a month of lobbying by the construction industry, the government has decided to raise VAT on building materials and construction services from 7% to 12%, and not 22% as had been originally planned. In 1997, the tax will go up to 17%, and finally in 1998 to 22%.
The Council of Ministers also accepted regulations concerning tax breaks for home building and remodeling. The government raised the deduction for those who build their own house from z*. 51,000 to z*. 60,000.
Home owners that renovate their flats will be able to write off up to z*. 12,000 ($5,000), and tenants that rent flats z*. 6,000 ($2,500). One new change is that only 50% of the tax break can go toward remodeling the apartment itself, and 50% should go to renovating the entire building, which the Ministry of Construction hopes will encourage people to invest in remodeling more than just their own premises.
Openings and
Receptions abound
Developer Ilbau and letting agents Prime Property held the grand opening of the newly-christened Baltic Business Center late last month. Peter Choynowski of Prime Property said that interest has picked up now that rents have been cut in half, but that the demand for space is still from smaller end users looking to set up representative offices.
Mahler Project International introduced their first project in Warsaw to the public as well, the Ochota Office Park. The first building, 100% equity financed by Mahler, will be completed in January. Exclusive leasing agents for the project are Healey & Baker.
Valuers
The Polish Federation of Valuers' Associations and the Krakow Real Estate Institute hosted an international conference late last month on the development of the Polish real estate market and the role of valuers in this market. Andrzej Kalus, head of the federation, emphasized his desire that Polish standards for valuation, accepted in May, would be applied by the increasing number of foreign appraisers operating in Poland.
The developer of the project is Jaros*aw Skowronski, known for the program he produced in 1989-1990 for Telewizja Polska entitled "PrzedsiebiorczocT" (Entreprenuership), a show meant to educate Poles about how small business works.
"I've heard hundreds of stories of people who sold everything they had so they could start up their own shop," Skowronski said. "They wanted to work for themselves."
In the early 1990s Poland saw the outbreak of this small-business fever in the form of streetside sellers and later the creation of the bazaars. Now Skowronski said it's time to move to the next stage: bringing these small shop owners out of the mud and into a modest but efficient environment.
"I felt it was high time to change the face of trade in Poland," Skowronski said. "In the beginning of the free-market changes, the most important thing was price. Now people want to be able to park their car, and shop around with dry shoes."
While the developer is the same for both buildings, the investors are different. The first building, which is expected to cost approximately z*. 10 million ($4.3 million) will be funded by a number of private Polish individuals. Construction of the larger shopping mall will cost around z*. 70 million ($30 million) and will be financed by Polish supermarket chain Bestopol, and Marek Mikuckiewicz, owner of MarcPol.
The amount investors will pay for the shopping complexes will depend on how the leasing goes. A large part of the project is financed by a down-payment in the amount of z*. 2,500 ($1,075) per square meter, meaning that if the building were fully pre-leased, tenants would pay for more than it costs to construct the building. All lease agreements are for five years, with tenants paying z*. 60 per square meter ($25) for the life of the contract.
VAT hops, not jumps
After a month of lobbying by the construction industry, the government has decided to raise VAT on building materials and construction services from 7% to 12%, and not 22% as had been originally planned. In 1997, the tax will go up to 17%, and finally in 1998 to 22%.
The Council of Ministers also accepted regulations concerning tax breaks for home building and remodeling. The government raised the deduction for those who build their own house from z*. 51,000 to z*. 60,000.
Home owners that renovate their flats will be able to write off up to z*. 12,000 ($5,000), and tenants that rent flats z*. 6,000 ($2,500). One new change is that only 50% of the tax break can go toward remodeling the apartment itself, and 50% should go to renovating the entire building, which the Ministry of Construction hopes will encourage people to invest in remodeling more than just their own premises.
Openings and
Receptions abound
Developer Ilbau and letting agents Prime Property held the grand opening of the newly-christened Baltic Business Center late last month. Peter Choynowski of Prime Property said that interest has picked up now that rents have been cut in half, but that the demand for space is still from smaller end users looking to set up representative offices.
Mahler Project International introduced their first project in Warsaw to the public as well, the Ochota Office Park. The first building, 100% equity financed by Mahler, will be completed in January. Exclusive leasing agents for the project are Healey & Baker.
Valuers
The Polish Federation of Valuers' Associations and the Krakow Real Estate Institute hosted an international conference late last month on the development of the Polish real estate market and the role of valuers in this market. Andrzej Kalus, head of the federation, emphasized his desire that Polish standards for valuation, accepted in May, would be applied by the increasing number of foreign appraisers operating in Poland.
