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edition 1 (227)
January 2018
Residential

Jaguar not included

Interviewer: Tomasz Cudowski

Jaguar not included
Marian Okręglicki, the president of the board of Sawa Apartments

What stage of development is the Polish premium apartment market at? Is it in its infancy or has it learned to walk?

Marian Okręglicki, president of the board at Sawa Apartments: I would say that it is standing firmly on its own feet. Already quite a lot of such projects have been built, so clients are no longer shocked by high prices or luxury furnishings. Only 5-7 years ago few people would have believed that any apartment in Poland could be sold at PLN 18,000 per sqm and developers were also sceptical about the market for luxury apartments with few interested in entering into it. These days nobody’s surprised by a price that’s twice as high and the premium apartment segment has already started to segment. This means that not only are developers more and more eager to enter the sector but that they’ve already started specialising.

How is the market segmented?

It is easiest to define the categories by giving the prices, even though such a categorisation will be very simplistic and symbolic. Apartments priced in excess of PLN 8,000-10,000 are usually of a superior standard and we can talk about exclusive properties being in the range of PLN 15,000-17,000. Customers have become more and more demanding and they know very well what they want even though they are not a large group – we estimate that around 1-2 pct of those buying new apartments are looking for exclusive properties.

But this is a relatively small group, which is quite scattered too. How can you reach out to potential buyers with what you are offering?

We certainly do not use the same methods as those used by developers in the popular segment because brochures and mass mailings do not work in our case. On the other hand, we do such things as organise events during which interested parties can come and visit completed buildings and get to know our apartments. We will organise other types of events during the construction period of an apartment building. These are mostly meetings for future apartment buyers to get to know one another as well as all the people who are contributing to the high quality and aesthetic appeal while the apartment building is under construction. These are special events for apartment buyers on the one hand and on the other they are also for interior designers, as well as the manufacturers and producers of furniture, materials and equipment. Such people normally meet up too late – when the building has almost been completed and there is no longer any chance to change apartment layouts. With us, it is the opposite case. Our client is a co-architect of their future apartment and we are very much appreciated for this. Recommendations are also a very important form of marketing – We estimate we sell 15-20 pct of our apartments in this way. You mustn’t forget that luxury buildings are usually in excellent locations where they are well displayed, so you wouldn’t be completely joking if you were to say that they sell themselves.

Still, the higher the price, the greater the expectations, which also includes the discount. Many believe that with a price of over PLN 12,000 per sqm there is room for negotiation.

Of course clients expect a discount but they know that it will not be 30 or even 15 pct but a a few per cent of the sales price at a maximum. Our way of swaying those that are almost convinced to buy is to use vouchers for our holiday centres in Polish resorts. However, this is only a bonus – the client has to be convinced that they are buying their ideal apartment at a very good price, otherwise they’re not even going to be convinced by a ‘Jaguar in the garage’.

Can you reconcile the interests of permanent residents and short-term tenants in luxury apartment buildings? I mean peaceful, family life with the continuous scraping of suitcases along the corridor. Or with apartments that are used as dental surgeries or law offices...

I’m aware that this can be a problem but it’s usually possible to resolve it at the design stage. For example in our Solec Residence complex we separated these different occupants and we have a total of four stairwells and reception areas: one for the office section and three others for the apartments. There is also a separate section of the building for smaller apartments that are usually bought for rental purposes whereas the largest apartments and penthouses are serviced by a separate reception.

Thats quite impossible in a residential tower.

That is one of the reasons why we do not build residential towers. They are for a different group of clients, such as those who prefer a dynamic city-centre lifestyle and feel at home in the ‘eye of the storm’. And they are also more affluent, too.

I can sense a note of jealousy in your voice...

(laughter) OK, agreed, if I could afford a plot near the Palace of Culture and Science, I would probably build a tower there.

What other advantages do luxury apartments have outside the city centre?

Plenty. Let’s start from the price per sqm, which is usually much lower, sometimes even by half. This increases the number of potential clients and luxury apartments are by definition a product which takes a long time to sell. Outside the inner city centre, the plots are usually larger, which makes it possible to create a patio or build a larger building for the car park. Such projects are usually smaller, so residents have a greater feeling of privacy, which a glass tower cannot provide. Powiśle, where we built our Solec Residence, has a completely different reputation than it did 10-15 years ago.

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