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The Warsaw Voice » Real Estate » April 30, 2010
The Real Estate Voice
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Austrian Developers: Poland is a Stable Market
April 30, 2010   
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Austrian developers are stepping up their operations in Poland. The multi-award-winning Andel’s hotel in £ód¼; Poleczki Business Park in Warsaw, the biggest office complex in Poland; and Zebra Office Tower, an ecologically-designed office building in Warsaw, have all been built by Austrian companies.

In 2008 alone, Austrian companies invested around 400 million euros in Poland, mostly in the real estate and building materials sectors, according to data by the Polish economy ministry. Among the largest Austrian investors in Poland are Europolis (real estate), Bau Holding Strabag AG (hotels, office buildings); Rigips Austria GmbH and Leier (building materials); Wienerberger (construction ceramics); Porr International (hotels); and Warimpex (hotels, office buildings).

Austrians in Poland are among the main investors in the hotel sector, but they also build office complexes, and less often apartment blocks and shopping centers.

Dr. Franz Jurkowitsch, chairman of Warimpex Finanz- und Beteiligungs AG, says there is not much difference between investing in Poland and other European Union countries. “The administrative procedures in some cities can be slightly complex and quite long, but, during our last two investment projects in Poland, the Andel’s hotel in £ód¼ and the Angelo hotel in Katowice, we were pleasantly surprised by the helpfulness of the local authorities,” Jurkowitsch says.

Austrian design
Warimpex Finanz- und Beteiligungs AG is a real estate development and investment company with headquarters in Vienna and offices in Budapest, Prague, St. Petersburg and Warsaw. Over the last 25 years, Warimpex has invested over a billion euros in real estate development in Central and Eastern Europe. It currently owns or co-owns over 21 luxury and business hotels, comprising over 5,000 beds in total. The investor also owns five commercial and office buildings, with a total of 28,000 square meters, mostly in the CEE region. Warimpex also owns about 50 percent of Warsaw’s Intercontinental Hotel and 25 percent of the Sobieski Hotel. It owns the award-winning Andel’s hotel in £ód¼ and hold a 50 percent stake in the recently opened Hotel Angelo in Katowice. It currently has three ongoing projects in Poland: Le Palais Office in Warsaw, Mogilska Office in Cracow, and the Galaxy Plaza Shopping Center in the eastern city of Bia³ystok.

Jurkowitsch says there is a lot of potential for business hotel development in Poland, especially in large cities. “A defining characteristic of the Polish hotel market is the strength of the local customer segment,” Jurkowitsch says. “In all our hotels, more than half the customers are Polish. Additionally, the only major difference between the CEE and Western European markets is the small number of budget hotels in the region, which provides for great investment opportunities. We believe in the need for building budget hotels, especially in the CEE, as more and more people travel, often on a limited budget, which creates a sizable demand, especially within the current economic context. Which is why we have embarked upon a joint-venture, along with Starwood Capital Group and Louvre Hotels Group to expand the presence of the Campanile and Premiere Classe hotel brands. Work on the first Polish projects will start imminently in Wroc³aw, Katowice, Bydgoszcz and Zielona Góra.”

Austrian momentum
Austrian companies are also increasingly present on the Polish office space market. Two Austrian investors, UBM Realitatenentwicklung AG and CA Immo International, are building the biggest office park in Warsaw. The almost 1 billion euro complex will offer nearly 200,000 sq m in 12 buildings. The first stage of the project, the construction of office and retail space, is planned for completion in 2010. The entire project is scheduled to be finished by 2015.

UBM Realitatenentwicklung AG has been in Poland since 1993. It build hotels and office and apartment complexes. UBM has regional offices in three major cities, Warsaw, Cracow and Wroc³aw. Its latest projects are Oaza Kampinos, a housing complex near Warsaw, an apartment complex in Wroc³aw, and a multi-family building in Cracow.

Austrian standards
Austria’s S+B Group is the owner of the Zebra Office Tower under construction near Rondo Jazdy Polskiej traffic circle in Warsaw. The building is expected to open to tenants by the end of this year.
According to Izabella Kieler, head of leasing at S+B Group, negotiations with some prospective tenants have been “quite demanding, as they have very high standards.”

“Tenants in Poland know what they want,” Kieler. “They are more demanding than in Prague or Vienna. They attach a lot of importance to finishing: lighting, flooring, space arrangement. They pay attention to kitchen fittings, ask for air-conditioning specifications, or sometimes even want to know what the electrical outlets will look like beforehand. Many customers also additionally hire specialized space arrangement consultants. They pay close attention to costs, but mostly want a high standard for a reasonable price.”

The Zebra Office Tower offers nearly 18,000 sq m of office space on 14 floors.

Reinhard Schertler, managing director of S+B Group, says, “We designed this building with smaller companies in mind as well. Which is why it is possible to rent office space from 250 sq m and up. From the beginning, Zebra was planned to serve the needs of all potential customers equally well, irrespective of their individual surface requirements. Typically, they are lawyers, doctors or tax and financial advisers.”

In March this year, the building was entered into the Leadership in Energy and Environmental Design (LEED) certification process run by the U.S. Green Building Council, which tests for the efficient use of resources such as water, electricity and air.

Meanwhile, S+B Group is finalizing the purchase of another plot in the center of Warsaw for the construction of a new office building.

“The Polish market, compared with the rest of the CEE region, is extremely stable,” says Schertler. “Warsaw is a large, very beautiful and interesting city. We have wanted to do something here for a very long time. At this moment, we have ongoing projects in four cities, and three of them offer a really good investment climate: of course Vienna, our home town, Prague, and Warsaw. The fourth market we are present on is Bucharest, the Romanian capital, but there matters are a bit more complicated because of the crisis.”

Magdalena Fabijańczuk
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