That was the year, that was!

The silver jubilee of the event, which took place on November 26th at the Bristol Hotel in Warsaw, brought together almost 200 people from the sector. They were welcomed by Ewa Andrzejewska, the editor-in-chief of Eurobuild CEE. During the opening panel, ‘The Investment Market: The Star of the Region and Beyond’, which was moderated by Paweł Dębowski, a partner and the head of the European real estate law team at Dentons Warsaw, the speakers pointed out that half of the transaction volume finalised on the real estate market in the CEE region in the last six months were for Polish assets – with EUR 2.72 bln being forked out from investors’ pockets on properties in Poland. The panellists then pondered upon what risks might lie ahead for the investment market. The moderator focused on the situation on the retail market, which is very different from what it was a year ago. Agnieszka Jachowicz, a member of the board at the Polish Commercial Real Estate Chamber (PINK), drew attention to the fact that the total transaction volume in Poland for retail buildings was down by more than half this year. Other speakers, Leszek Sikora, the managing director at ECE Projektmanagement Polska, and Łukasz Duczkowski, the investment director at Globalworth, stressed the positives. Kirill Zavodov, an executive director at Goldman Sachs, however, predicted that the next five years could be difficult for some medium-sized retail assets. The attractiveness of retail and office buildings and the diversity of their locations in Poland was emphasised by Piotr Zamkotowicz, a co-founder and partner of Augusta Cracovia, which represents Filipino group ISOC in Poland. Łukasz Duczkowski also spoke about Polish offices in glowing terms. The attractiveness of the investment market in Poland was put further under the spotlight by Kirill Zavodov. The panel also discussed the current business cycle and the expected slowdown. Everyone agreed that it was difficult to say when it would happen, but apparently it isn’t going to be any day soon.

The moderator of the sparring session, Lucyna Śliż, the head of retail business development at Cushman & Wakefield, asked its combatants whether this was the end of retail as we have known it, what impact the Sunday trading ban has had on the sector, how to cope in a volatile environment and also about what modern consumers are now looking for. According to Karol Bartos, the head of the asset management department at Atrium European Real Estate, only retail that has a clear idea of where it is going has a future. To this, Jacek Wesołowski, the managing director of Trei Real Estate Poland, retorted: “Chains do have ideas for themselves, but the turnover is all on the internet. It has to be stressed, though, that brick-and-mortar shopping is the driver of online retail,” opined Jacek Wesołowski. He also argued that the retail parks now work well even in very small towns. In Karol Bartos’ view, shopping centres are still evolving, becoming more like lifestyle centres that combine various services under one roof.

Bartłomiej Sosna, a construction market expert at Spectis, took to the floor after the retailers. In his presentation he focused on the fact that the construction sector was still struggling to maintain its profitability and revenues. The biggest issues for the construction market in Poland are the high employment costs and the labour shortages (although this is already becoming less of a factor, as are the rising prices of raw materials). The state of the market can also be gauged by the significant fall in the number of active construction companies. So what lies in store for us? According to the forecasts, GDP growth is expected to continue to slow over the next few years while employment costs will keep rising.

On the residential panel the speakers were Dariusz Węglicki, the head of Catella Residential Investment Management for Poland (the moderator), Piotr Gromniak, a member of the board of the Resi4rent platform, Tomasz Łapiński, the CFO of Cordia Polska, and Ewa Surowska, a senior consultant at Leach & Partners. The panellists agreed that the residential market in Poland is still flourishing and developers are selling all their standing supply to individual investors, taking into account their needs and preferences, although these are not the same as institutional investors’. Only a few developers that have been focusing from the outset on selling entire buildings to investors on the rental market have got to grips with what is so specific about this sector, while the nature of the lending market in Poland is also hindering investors from teaming up with developers. The panellists also touched on demographic changes – young people are now attach less importance to ownership. They also agreed that the institutional rental market is not set to spread beyond city centres to more peripheral districts at any time soon. It’s also hard to see it taking root outside the country’s seven largest cities. “We are going in the right direction and there are signs that the market will continue to grow vigorously. We are still at the initial stage of development, as we were with offices or retail 20 years ago,” concluded the moderator.

After the coffee break, the office panel considered if the fact that more is currently under construction in regional cities than in Warsaw reflects a decrease in interest in the office market in the capital. The moderator, Monika Sułdecka-Karaś, a regional director at Knight Frank, put this point before the panel. Anna Celichowska, a member of the board and the director of leasing at Virako, and Sebastian Świstak, the director of the Cavatina office in Warsaw, pointed out that developers were starting to invest where they felt most secure. Piotr Szafarz, a partner and head of the real estate law team at Dentons in Poland, denied that the terms of lease agreements depend on the distance from Warsaw. He also explained that the differences between Warsaw and the regions might be the result of the lack of large supply in smaller cities. Grzegorz Trawiński, the director of the real estate financing department at MBank, explained the relationship between the vacancy rate and the willingness of financial institutions to finance office projects. It all depends on the city in question, what its prospects are and whether the market there is liquid. The panellists also took a look at renovation projects. It was remarked that regional cities have been doing their homework in this field and coming up with increasingly attractive conversions. In her summary of the discussion, Monika Sułdecka-Karaś stated that that regionalism was not evident in lease agreements. Piotr Szafarz also pointed out that Dentons is looking with interest at ‘micro-regionalisation’ within Warsaw.

Grzegorz Mroczek, a deputy CEO of Cream Property Advisors, then took to the floor to talk about the end of shopping centre management as we now know it. In his opinion, 2020 will be difficult due to the rising costs of services and utilities. Cream offers a CNC service (Cream NOI Control) to optimise a building’s operating costs and increase its value. When it comes to secondary centres that have not been able to secure, a good position on the market Cream offers its C360 initiative, to analyse the performance figures of a mall comparing them with those of shopping centres of a similar scale and position in towns of a similar size. Cream is also soon to offer a ‘Sell Me’ service, which it developed with Cream Legal to assist in sales of such assets.

Robert Dobrzycki the head of Panattoni Europe closed the conferene by giving direct answers to questions about his business as well as his private life. He revealed that in September 2020 the company is to hold a special gala to celebrate its 15th anniversary. When asked for his definition of the ideal employee, he replied that they should be independent, entrepreneurial and open to new ideas. He also announced the further introduction of environmentally friendly systems in his parks. According to him, the most important values ​​are respect and humility. The latter is, in his opinion, the most important attribute in business. He also values the concept of the work-life balance. When he retires, he plans to invest in commercial real estate. And he never intends to leave Poland.