Spanish armada
Willing to pay sky-high prices, developers from Spain have been fearlessly snatching up the most attractive plots in all the major cities. Lokale Immobilia examines their impact on the market
With decades of experience and know-how, Spanish brands are quickly establishing a powerful presence on the Polish real-estate market. Enrique Lacalle, chairman of the organizing committee of Central Europe Meeting Point (CEMP), which aims to foster business relations between Spain and Poland, says that investors see clear parallels between Poland's current economic situation and that of Spain at the time of its accession to the EU twenty years ago. Now that Poland has been named one of the hosts for Euro 2012, Spanish investors are primed to reap the profits, as they recall how much revenue the games generated for Spain and Portugal in years past.
Reas president Kazmierz Kirejczyk agrees with the view that Spanish firms are the most conspicuous and enthusiastic market players. "These developers are extremely optimistic about Poland's growth, proven in the record prices that Spanish developers are paying for land," he says.
Raising eyebrows
Spanish investors are setting the standard for high land prices and raising eyebrows on a market where price per sqm for mid- to upper-level residential investments ranges from roughly zł.1,000 to zł.5,000. The zł.369-million purchase of a 4.5-ha plot in the center of Wrocław by GP Investments, a subsidiary of Cordoba-based Grupo Prasa, caused a stir earlier this year when the company outbid the asking price several-fold, driving all other bidders out of the competition almost immediately. The company will build a 32-storey mixed-use tower over 180,000 sqm in area - expected to be the tallest building in Wrocław. GP will also invest R300 (zł.1,133) million on the redevelopment of a former brewery on ul. Grzybowska in Warsaw into a 42,000-sqm mixed-use complex.
Sando Inmobilia and Lubasa's purchases of plots on the site of liquidated bus depots in central residential districts of Warsaw confirmed the strength of the Iberian presence in the market. The firms dished out close to zł.400 million each.
Tomasz Puch, associate director at Jones Lang LaSalle's capital markets team, finds that Spanish investors know where the market is heading. "They are prepared to pay good prices now, trusting that the market will improve in the mid- to long-term perspective." He says that the firms are getting more involved in developing the properties that they purchased in recent years, which demonstrates a strong belief in the Polish market.
High rollers
Lubasa's deal for the property on ul. Inflancka in Warsaw, which works out to roughly zł.13,600 per sqm, broke all records to date. The complex of 1,100 top-standard apartments in two high- and two medium-rise towers, located in one of Warsaw's most historically prestigious residential districts and in direct proximity to the commercial center, is planned to open next year.
On its Chełmska plot, Sando is planning to build 100,000 sqm of luxury and mid-range apartments and the company will soon initialize work on its Sansara property on ul. Górczewska. Sando's current holdings include plots valued at R150 (zł.567) million for 2,600 new homes in addition to its developments in Bemowo, Bielany, Wilanów and Mokotów.
Reas' Kirejczyk cites Fadesa Prokom, a Spanish-Polish joint venture responsible for the sprawling Ostoja Wilanów project, as the most active developer on the scene. The company is building 1,790 homes on a 17-ha plot on a lush green property 10 minutes from the city center. Fadessa Prokom has four other residential projects in its portfolio, totalling 4,400 homes in Wrocław and the Warsaw area.
Into Acciona
A number of experts consider Accionia the most firmly-established developer on the Polish market, well-known for its contract for the Okęcie airport expansion. Its has several residential projects in development, all of which are sold out, even though the properties won't be ready for another six to 12 months. The company is at the sales stage for its newest development, Apartamenty Sielecka, in Mokotów and is planning a modern residential complex of 168 apartments on the intersection of ul. Pańska and ul. Prosta in Warsaw's center.
Ul. Prosta will also see the construction of two high-rise residential/commercial towers from Pro-Urba, another of the Spanish heavyweights. Pro-Urba will also deliver a massive development a few blocks over - a virtual micro-metropolis on ul. Sienna, comprised of 1,300 homes on seven ha, complete with its own infrastructure and facilities such as health clubs and restaurants. The company is also preparing a residential complex on the site of the former Waryński production plant in the area, in addition to projects in Wilanów and Mokotów.
It's not all about bulk, however, as the case of Restaura demonstrates. The company specializes in renovating landmark townhouses in major European cities. The company's activities in Poland include three renovation projects in Warsaw and the construction of a luxury residential property of 109 apartments. The company holds another three plots over 113,000 sqm in total, and plans to develop 1,500 apartments at an investment of R100 (zł.378) million.
Up-and-comers
Level, which holds 80 ha of property in Łódź, Grupo Harmonia and Promex are also running head to head with Fadesa, GP, Acciona, Sando and Pro-Urba in the race to bank on the insatiable housing demand. Executives from top companies such as Pro-Urba's Jose Ignacio Gil Valganon and Jose Luis Lazaro Perez expect to see the population double in Warsaw over the next fifteen years - and they plan to be there when the residential boom peaks.
According to Warsaw's Municipal Office for Investor Services, there are over 50 Spanish firms currently active on the Polish market. Up-and-coming players planning large investments in the country include Grupo Lar, Nuevadimension, Neinver, Interplus, Inverpolonia and Cogilco Polonia.
