OVERALL INVESTMENT

Is the investment attractiveness of the real estate market in Poland returning to the pre-pandemic rhythm? How will the investment craze on the warehouse market, caused by the pandemic and the development of e-commerce, evolve? Which way is the transformation of shopping malls ravaged by lockdowns heading? These and other questions were answered by the participants of the Property Forum 2021.

“We have a very strong rebound in the economy, which translates into real estate. The real estate investment market for the first half of the year still shows a slightly lower result compared to the previous year. However, the activity allows us to assume that the end of the year will be very strong,” predicted Tomasz Buras, managing director of Savills. “The investment market in the warehouse sector is not as deep as it was in the case of shopping centers or offices, but it is still growing, and fast. Today the situation on the financial market is such that we have very high inflation and a lot of money in circulation. That is why investors are diligently looking for fixed assets to invest, most often in real estate,” he said. “Investors' appetite for buying real estate is returning. We see an interest in looking for safe options. Transactions take place, there is no shortage of capital. They concern the highest quality products, in the best locations, on good markets,” claims Skanska’s Katarzyna Zawodna-Bijoch, president and CEO at Skanska Commercial Development Europe. “Investors’ appetites are more polarized today — on the one hand, there are core players investing safely, and on the other, those looking for a large discount due to higher risk. The cluster between these two poles is much smaller,” she noted.

WAREHOUSES

The warehouse market in Central, Eastern and Southern Europe has become a hot commodity. This results from current and expected growth in e-commerce but also planned relocations from Asia to safeguard against future supply-chain disruptions. Reuters recently quoted Raben CEE director Tomasz Niezwicki as saying that: "Companies will return to Europe from Asia. We need to be ready to take over when this happens."

“For 20 years, everyone has been waiting for a rent increase in warehouses. More and more consultants suggest that if the building is in the right location, for example, on the outskirts of Warsaw, Wrocław or other key markets, then in the next 12 months a rent increase can be expected. This is a reasonable forecast, especially considering the rising construction prices,” admitted Hadley Dean, founder of MDC².

“E-commerce has been driven by a pandemic that has changed consumer behavior. E-commerce companies are one of the main beneficiaries of the pandemic, which in turn fueled the warehouse market. I think that this process is now irreversible and we will see an increasing penetration of e-commerce in the countries of our region,” said Przemysław Krych, founder of Cornerstone Investment Management and Griffin Real Estate.

“Large e-commerce warehouses will be the everyday life of the warehouse market. However, at the moment it is a tough market for contractors,” said Robert Dobrzycki, CEO, Panattoni Europe.

SHOPPING CENTERS

“Most of the owners of shopping centers were willing to grant rent discounts depending on how the tenant was doing and the financial power they had. This happened regardless of state interference. Meanwhile, the government decided to interfere in our relations twice,” pointed out Tomasz Trzósło, president of EPP. “The problem is the government ordered us to give aid to all tenants, regardless of their general situation or online sales. As a result, large players got lots of help and smaller tenants — who needed more support — got less,” emphasized Trzósło.

Aleksander Walczak, president of Dekada, added that the crisis related to the coronavirus accelerated many changes in the retail market, but in his opinion, they are not happening so quickly. “I have a more conservative approach. Despite many discussions, I do not see a revolution in the market. We will continue to improve our operating model, but slowly, without going crazy,” he said.

Renata Kinde-Czyż, president of Metro Properties, drew attention to service quality at brick-and-mortar locations, which, in her view “lags behind online.” “We should also organize deliveries at the mall level and use the technologies that are currently used by online trading because we do not have too many of them in our portfolio. We need to be in contact with customers and follow their purchase profiles. If we respond to the needs of local communities, investors will come back because sales will grow,” she said.