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The Warsaw Voice » Culture » September 17, 2008
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Stability and Opportunity
September 17, 2008   
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Alan Colquuhoun, managing director for Poland and Central Europe at DTZ Polska, speaks with Jolanta Wolska.

Is DTZ involved in the hospitality real estate market in Poland?
We work predominantly within three sectors in the commercial area: offices, industrial and logistics, and retail. Since July 2007 when DTZ acquired the Donaldsons business, the retail property sector has increased to 50 percent of our activity here. The hotel side is only a minor area for DTZ in Poland.

There is a lot of potential in the hospitality sector, like in so many areas in this country.

Do you think that the Polish real estate market is overheated?
The demand for commercial properties has been strong. Everything that has been built has been leased up. It is the demand that has been driving rents and the demand has been driven by domestic growth, which in turn is driven by fundamentals, that is Polish people spending money, their newfound wealth. It is not foreign direct investment any more or external things that have been driving that growth as was the case in the 1990s. So this is quite healthy.

The investment market peaked in 2006 and has been falling since then. It was expected to fall even before we heard the term "credit crunch." It is part of a natural cycle. Volumes are of course very much lower than in the peak year 2006. At the moment, we have quite a healthy balance between supply and demand. The supply situation in the very center of Warsaw will remain quite tight until 2010-2011. It may not be such a dynamic period demand-wise, but it will still be quite a buoyant healthy scene.

Are there any specific hurdles in Poland that make operating here more difficult for businesses than in other countries?
None in particular. We are becoming a normal EU country here. Four years after joining the European Union, Poland has a unique and almost perfect balance of risk versus reward. There is an opportunity for good returns in Poland because of its size, its large cities and large urban areas. There are more opportunities for slightly higher returns than in Western Europe. There's nothing like the risk you now face in Russia and Ukraine or arguably Romania or Bulgaria, or the former Yugoslavia. For those looking for a good mix of stability and opportunity Poland has it all.

My biggest disappointment applies to all the postcommunist countries, not only Poland. When I look around and see how dynamic people are here and what has been achieved, I think the Polish people can do and deserve a lot better in terms of streamlining the civil service and bureaucracy. And road building and infrastructure is another issue that needs to be grappled with.

Does DTZ serve more Polish clients or foreigners investing in Poland?
The majority are multinational or international companies. Currently a retail developer who has three or four shopping malls under construction is one of our biggest Polish clients, but a number of the tenants that we're seeking to go into these malls are international.

I would say about 70 percent of our business is with international clients or businesses. They come from everywhere, but at the moment Germany, Britain and Austria are by far the biggest, closely followed by France, the United States, Israel, and Sweden, plus Norway and Denmark.

Why did you think it important to become a member of the Warsaw Destination Alliance?
We are based in Warsaw, and probably about 40-50 percent of our business comes from the capital. So, as a service company it is in our interest for Warsaw to improve its image abroad with foreign investors and so we can attract more visitors, more conferences. And it is a socially responsible thing to do as well.

Warsaw does have a kind of a drab image. I think that is because it is known as a city that was destroyed by the Nazis and rebuilt by the communists. Recently, we had a two-day conference at the Warsaw Intercontinental Hotel for 70 senior directors from across our EMEA region-Europe, Middle East and Africa. Without exception they all went away with a glowing impression of Warsaw. The service was excellent, the organization was fine, the hotel was brilliant. The food in Warsaw's restaurants was excellent, and the city was great. Warsaw and all its facilities were so much more modern and better than they had expected. And I was genuinely quite proud of Warsaw and of Poland. There is a vibrant cultural life in this modern and dynamic city. I do spend a lot of time sticking up for Warsaw and for Poland. I have been in Poland for nine years, and I love it here.

WDA City Fee Collection/Levy in July 2008-zl.58,750

In July WDA member hotels collected a total of zl.58,750 from voluntary levies from hotel guests. Since the beginning of the year, a total of zl.425,096 has been collected.
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