The Praga Spring

Spurred by the recent development of the new M2 metro line, Warsaw’s Praga district is undergoing a renaissance By Alex Hayes Praga has probably always been one of Warsaw’s more neglected districts, but this has not always proven to be a disadvantage, as Praga remained intact when the Nazis systematically destroyed the majority of the buildings on the left bank of Warsaw towards the end of the Second World War. Now, Praga is one of the few districts to retain its original architecture. However, further neglect by the city authorities has left the district to decay, resulting in an area with a grim reputation where none but the most foolhardy dared tread. Now, at last, the district is being pampered by the city authorities, with improved transport links to the center, including the opening of the new M2 metro line and the promise of PLN 1.5 billion in new investments from the city supported by EU funds. Praga may well become one of the more trendy districts of the capital. On March 8, 2015, the long-awaited M2 metro line was finally officially opened after numerous delays. The new subway link currently stretches from Rondo Daszyńskiego in Warsaw’s Wola district to Praga’s Dworzec Wileński railway station. The line should eventually be extended and will split into two on the Vistula River’s eastern bank and run to both Gocław and Bródno, while on the other side it will be extended to ul. Połczyńska. [caption id="attachment_77514" align="alignleft" width="300"] Image: Port Praski[/caption] Developers have had access to these plans since 2007, but according to Karol Dzięcioł, a partner at REAS consultancy, apartment developers have been slow to react having waited for palpable progress to be made on building the new metro before committing their resources. “The construction work started some five or six years ago and this was the moment which gave new impetus for the redevelopment of Praga as well,” he explained. Moreover the actual opening of the metro line has clearly given a fillip to residential developers. “Over five years, nothing special happened there and suddenly, after the development of the metro line, some projects were moved forward. Developers were waiting for the right moment to introduce new projects to the market.” Despite this seemingly sluggish reaction to changes on the market, the developers had already purchased the investment land well in advance. However, they appear to have expected the subsequent delays to the development of the metro (the original opening of which was posited for 2012) and then showed no willingness to risk introducing new product to the market before the improvements to the transportation infrastructure were underway. The ugly duckling This lack of transportation infrastructure should not have been so much of a hindrance to the district’s development. After all, if one thinks about the old developer’s saying of the three most important factors in any new investment being “location, location, location,” Praga is not that badly situated. It lies directly across the river opposite the city’s old town and it takes ten to fifteen minutes by bus to reach the city center. [negative]Praga is one of the few districts to retain its original architecture. However, further neglect by the city authorities has left district to decay[/negative] But years of neglect have led to a situation where many of the residential buildings in the area, many of which were built before the war and are often owned by the city, are not connected to the city’s heating system. “Five years ago,” explained Dzięcioł, “only around five to ten percent of social housing had access to the central heating pipeline. There was a huge lack of infrastructure there.” Indeed the record of underinvestment in this district, he claims, stretches back around 150 years. However, the area is clearly improving now with bars and clubs that have opened up in old industrial buildings, and the early stages of gentrification can clearly be seen with people visiting the area partly because of it being off the beaten track. “It started with different sorts of cultural activities. This brought people searching for fun and leisure opportunities. Hipsters also liked this district, being a non-mainstream location and later, it became more and more attractive for other buyers,” explained Dzięcioł. Now, despite the district having a reputation of being a bit rough, police statistics show that the area has lower crime rates than other districts, such as downtown and Wola, and they are even below the average for the city taken as a whole. Meanwhile, despite the large amounts of social housing, unemployment in the area is only marginally higher than in the rest of the city. And now at last, the city authorities are proposing to spend some serious money to revitalize the buildings [caption id="attachment_77516" align="alignright" width="300"] Image: Koneser[/caption] in the area. They have designated what they call a “crisis area” in the Praga Południe, Praga Północ and Targówek areas. In Praga Południe, there are 358 residential buildings owned either wholly or partly by the city; in Praga Północ, the city has 676 such buildings and in Targówek there are 143. This represents almost half of all the city-owned housing in the capital. Prior to a heating utility connection project in 2010-2014, around 14 percent of the council homes in the crisis area were connected to central heating, 97 percent were connected to the sewage system and just 22 percent had proper bathrooms. To remedy the situation, the city will put up around PLN 1.35 billion, with a further PLN 150 million coming from EU subsidies, for revitalization. The city plans to connect 267 council-owned buildings (4,800 apartments) to the heating network, as well as renovate 164 city-owned tenements with PLN 360 million in financing from BGK bank. The authorities will also build 860 new social housing units, 160 apartments designated for lease as well as modernize 670 apartments in older buildings. The revitalization program also aims to support local business and improve tourism to the area. This program is clearly going to improve the desirability of Praga. Two can play that game But it’s not that the revitalization of Praga’s historic buildings is being carried out by the city authorities alone. Private investors are also looking at what can be done with the district’s older buildings. One such example is the Koneser project that is being carried out by Liebrecht & wooD and BBI Development. This mixed-use project is being developed on the former grounds of the Koneser Vodka distillery and involves the modernization, conversion and revitalization of a number of 19th century factory buildings. The project will entail the creation of 300 apartments, as well as 22,000 sqm of retail and service space with a further 22,000 sqm of office space. The project even includes a vodka museum. All of this is being created on a 5-hectare site in the historic North Praga quarter. Marc Lebbe, the managing director of Leibrecht & wooD describes the site as magical. “When I saw Koneser for the first time some years ago, the very first thing that came into my mind was: ‘Wow, this is a place of enormous potential,’” he explained. The district’s surly reputation was of no consequence to him and he stated, “Of course, I’ve heard some stories about the district’s history and how it’s been perceived, but frankly, I have never experienced any problems here,” and he went on to say that, “generally, I think that the questionable reputation of Praga results mainly from stereotypes.” Strategic subway line However, the development of the underground, though important, is not an essential factor for the success of the project for Lebbe. “I would say that even without the metro station nearby, Koneser would still be a great place to live, work and relax.” This project is scheduled for completion in 2017. It would be too much to state that the development of the metro line is completely without meaning for the region. Bogumił Rutkowski the vice president of PPI Investments was far from blasé when talking about the meaning of the metro in relation to the company’s Blisko Praga project comprising 84 apartments, stating, “We had sold around 75 percent of the apartments two months before the completion of the metro. Such an investment could have been begun without an improvement in public transportation, but certainly at lower prices and a slower rate of apartment sales.” Further industrial revitalization [caption id="attachment_77513" align="alignleft" width="300"] Image: Metro Warszawskie[/caption] Koneser is not the only former factory site in the Praga district and Liebrecht & wooD and BBI Development are not the only developers in on the trend. Okam Capital is also developing its Bohema project around the former Pollena cosmetics factory, a building which dates back to 1899. This project should deliver 900 apartments to the area. The developer has stated that, “We want to give this place back to Varsovians, to create a new, vibrant center in the Praga District.” Again the developer underplayed the importance of the development of the metro line: “Our interest in this place dates back to the period before the opening of the second metro line. Praga is becoming a trendy place in Warsaw and its bad image is retreating into the past.” The developer plans to place cafés, restaurants and boutiques around the factory’s central chimney. Of course, the project also includes office space. It should be delivered in 2018. It’s not just small industrial sites that are being invested in. In fact, there seems to be no shortage of large revitalization projects in the district, such as Port Praski, which comprises a 38-hectare site directly situated next to Poland’s National Stadium and served by both a railway and the M2 metro station. Eventually, the project will offer 160,000 sqm of apartments. Currently, one building with 30 apartments, Krowia 6, has been renovated. There is also the Black Lion Fund’s Soho Factory project, which is not particularly close to the metro line, but it is a short walk away from the central city rail line. It will eventually offer 120,000 sqm of apartments on a 8.17-hectare industrial site, where a number of factories used to produce armaments and cameras. The project is being built over many stages and completion is scheduled for 2023. So far, two buildings have been completed: Kamion Cross with 173 apartments and Rebel One with 41 apartments. Prices inch up There seems to be a clear preponderance for industrial revitalization projects in the district and for Lebbe, this comes as no surprise. “Unlike Wola or Służewiec, Praga has its own historic urban layout designed for living or working. So I can imagine projects based on re-use and revitalization of existing buildings here, rather than new office parks.” Neither does he fear the competition of other developers in the area because they are all working to increase the value of the district. However, this improvement is a slow process. “Generally developers are increasing asking prices by a few percent, but when you look at sales prices – the real transaction figures – there’s only a small movement up,” claimed Dzięcioł, but then he added that over the last five or six years apartment prices have increased by an average of two to three percent each year. u