Polish real estate - a safe bet?

Despite the current worldwide economic slowdown, Poland is seen as one of the future top destinations for real estate investors in the region. This was the prevailing sentiment at last week's British Polish Chamber of Commerce Real Estate Forum.

"Although real estate was the root of the current global crisis, it is now considered a safe bet for investors, who were strongly discouraged by the state of the financial system in the world," said Richard Mbewe, a managing partner and CEO at Atria Real Estate Partners.

Mbewe said that the market in Poland was still maturing and the current correction would eliminate smaller developers who finance residential investments with customers' down-payments, leaving only those firms with strong financial foundations.

"The US credit crunch will have a limited affect on the Polish market, because the bank supervision [regulators are] doing [their] job," Mbewe continued.

The Polish market for office space also seems ready to take off.

"We are predicting a record-high supply of office space in Warsaw in 2011 - 500,000 sqm," said Dorota Ejsmont of King Sturge.

Henryk Romańczuk, a partner and attorney at Wierzbowski Eversheds law firm, lamented the complicated construction regulations in Poland - a major obstacle for investors. He spoke about a new construction law that should speed up the investment process, which is currently in the phase of public hearings.

"From mid-2009, the ruling on the conditions for development will be replaced by local authorities' approval. A decision will be made based on local urban parameters," said Romańczuk.

"Then the investor would register his investment - this is to replace a building permit - and if nobody appeals within 30 days, construction will be allowed to begin," he said.