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edition 6 (231)
June 2018

Łódź, Łódź – wink, wink!

Eurobuild CEE’s 9th Hotel and Office Investment Conference, in Łódź


Łódź, Łódź – wink, wink!

The Eurobuild conference on the Polish hotel and office investment market took place at the EC1 Centre for Science and Technology in Łódź on April 18th. special emphasis was given to the Łódź market during the Łódź REdiscover section of the event

The 9th Hotel and Office Investment Conference started with a discussion on the future of the Polish hospitality sector. The country’s GDP growth together with the development of the BPO/SSC and MICE sectors have given a dramatic boost to the demand for accommodation, which investors are now striving to meet. “We currently have 15,000 rooms under construction in Poland. That’s about 14 pct of all the rooms in the country,” remarked Alex Kloszewski, the managing partner of Hotel Professionals Management Group and the moderator of the first panel. The largest players are actively looking for new locations for their projects. This is far from easy since the best sites have already been taken in many cities. “Some cities are already heavily saturated with hotels. However, this does not bother us too much because we are looking for both central and peripheral locations,” explained Jacek Stasikowski, the development director of AccorHotels and Orbis. Piotr Ratajczyk, the operational director of Konkret Group, added that his company has been preparing the Modlin Fortress project, where 1,000 rooms and a congress centre are to be built.

Developers across the country are looking to take advantage of the current strong demand from consumers and tenants and so a lot of projects are under development, with the largest players aiming to develop in as many of the most attractive locations as possible. “We are present in many regional cities, but focused mainly on Warsaw. We are of course looking for city centre plots, in established business districts. We are also aiming to create new office locations by ourselves,” explained Grzegorz Iwański, the director of the financing at Echo Investment. “We are no strangers to creating new locations. We also concentrate on finding places in regional cities, such as Gdańsk, Kraków, Katowice, Łódź – these are the first choice centres for us,” commented Jarosław Jukiel, the financial director of Ghelamco Poland. “We want to be where the demand is,” he added. “Which projects are the banks that finance such projects most interested in?” asked Hubert Mańturzyk, the head of debt and structured finance at CBRE. “We focus mainly on construction projects in almost every sector – from shopping centres, to offices, warehouses and hotels. When it comes to locations, we have provided a lot of finance, for example, in Warsaw last year – and now we are moving into regional cities,” responded Łukasz Białecki, the head of real estate financing at Bank Pekao. “We are financing many residential projects in a good number of cities in Poland. We also finance commercial projects, especially through construction loans – these amount to half of our annual exposure. Currently, we are heavily involved in the financing of warehouse and office projects. With office projects, we have been involved in several construction projects in Wrocław, Kraków and Łódź. We simply follow our clients,” stated Grzegorz Trawiński, a board member of MBank Hipoteczny.

The largest section of the event was devoted to Łódź, this year’s venue for the conference. “There is a great deal going on in the city centre, where there are a lot of construction sites. New Łódź – a well thought-out city centre built from scratch, will be developed around this location. We want to build a city that is a good place to live in for both its existing inhabitants and those who would like to move here in the future,” declared Krzysztof Piątkowski, a deputy mayor of the city. Developers have for a long time viewed Łódź as an attractive location for office projects. According to data from ABSL, Łódź now has more than 20,000 people employed in the BPO/SSC sector. “There is already 450,000 sqm of office space in the city and more than 75 shared service centres. Łódź is growing rapidly and has the potential for further expansion,” pointed out Łukasz Czajkowski, the head of membership, network and community at ABSL. Office developers have been followed into the city by hotel investors, where the intensive development in the city has acted like a magnet. “In 2013 we bought a site from the local authorities opposite Manufaktura – the revitalised former textile mill complex. At that time Łódź was not such an obvious location on Poland’s hotel map. We waited for several years, monitoring the market, as we didn’t want to make a false start, but we believed in the potential of this city and knew what the plans for its development were. We are now building and will be opening soon,” revealed Przemysław Wieczorek, the investment director of Puro Hotels. “I must stress that the atmosphere created for investors by the Łódź authorities has been something of a revelation. It is unique. The city has realised that development involves teamwork. As a result, developers feel that more projects can be undertaken here. The office developments were the first, but the hotel sector has also benefited from the construction and commercialisation of office buildings,” argued Przemysław Wieczorek. Krzysztof Misiak, the head of regional cities at Cushman & Wakefield, was of the same opinion: “If we look closely at what’s happening in Łódź, there is no other city in Poland that can boast such transformational energy in so many areas,” he insisted.

Łódź is also attracting developers interested in alternative products, such as student residences. “We became aware of the demand for private student halls in Łódź five years ago. The universities here were not particularly interested in developing such buildings, but after consulting student bodies we were convinced that students expect higher standards than those offered by public facilities. After a market analysis, we built Super Akademik with 270 rooms. When we started leasing, it became clear that even if we had three such buildings there would have been no problem finding residents for them,” said Urszula Aleksandrowicz, the CEO of MRT Philosophy. “This confirms the potential of Łódź, which is not regarded as an academic city for nothing,” she added.

However, the potential of the city is far from exhausted. Its central location, its impressive economic growth, its academic facilities and its many tourist and cultural attractions are also contributing to the development of the MICE sector in Łódź. “We currently have 32 hotels and there are several more under construction. I think that the hotel market will become fully developed when we complete all the trade fair, conference and exhibition facilities we are currently working on,” predicted Adam Pustelnik, the acting director of Łódź city council’s Investor and International Cooperation Centre.

The conference was fittingly brought to a close with a networking evening, which was held in the city’s Bawełna restaurant.


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