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The Warsaw Voice » Real Estate » July 29, 2011
High-End Apartments
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Growing Taste for Luxury
July 29, 2011   
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Interest in luxury apartments in Poland has been growing over the past few years. The buyers are not just wealthy Poles but also foreigners, with both groups acquiring such apartments as either homes or investments.

The Polish luxury apartment market began developing in the late 1990s. Initially luxury residential projects were only built in Warsaw. Soon they also began to appear in other large cities: Cracow, Wrocław and Gdynia as well as major resorts like Sopot, Jurata, Międzyzdroje and Zakopane. Luxury apartments in tourist destinations can be an investment at the same time as a place to spend vacation time in a comfortable setting suited to your needs. The owners can also rent them out.

Though there is no single definition of a luxury apartment, a few qualities are widely accepted to be a must for such real estate. The most important are location, quality interior finishing and architecture. Deciding to buy a luxury apartment, clients first consider the surroundings—most often the city center, having the Old Town nearby, or being in an expensive, fashionable district. Original architecture is also important. It is an asset if a building was designed by famous architects, invokes the latest architectural trends and is made of top-quality materials.

High-standard apartments are fitted with air conditioning and advanced technical equipment (such as HMS or BMS—Home/Building Management Systems). The minimum area of a luxury apartment is about 70 square meters, but this differs depending on the market. The height of such homes should be greater than 2.8 m and in fact they are often higher than 3 m. Another typical feature is the apartment’s open-space design thanks to which the home can be divided into a night-time area just for the family and a day-time area for entertaining. Luxury apartment buildings offer facilities like swimming pools, spa centers and gyms. Concierge services are becoming popular, offering extras such as shopping and cleaning. The residents’ safety is ensured by round-the-clock security and monitoring.

Luxury at a price
Specialists point out that true luxury apartments account for just 2-3 percent of apartments offered on the Polish market. This might seem very little compared to Western countries such as Britain, France or Germany, but the Polish luxury home market is relatively young and still in the development stage. On the other hand, regardless of the country, the cost of such apartments is high. Luxury comes at a price.

The unquestioned price leader on the Polish luxury apartment market is Warsaw, where the greatest number of such homes is built and sold. Prices of luxury apartments in the Polish capital can vary significantly, however, ranging from zl.11,000 per sq m all the way to zl.40,000 per sq m or even more. In the Gdańsk-Sopot-Gdynia area and Wrocław, a luxury apartment can be had for zl.10,000 per sq m, while the price in Cracow is about zl.13,000 per sq m. Even in these cities, you can find apartments costing in excess of zl.25,000 or even zl.30,000 per sq m. In Poznań and ŁódĽ, where demand for and supply of luxury apartments is relatively low, a luxury apartment can cost even less than zl.10,000 per sq m.

Old factories and glass towers
Luxury apartments can be located in an old restored tenement building, in row housing, in old factories but also in skyscrapers. The global fashion for residential towers did not bypass Poland and several projects of this kind were begun some years ago. But the financial crisis modified developers’ plans. Many projects planned before the crisis were abandoned, some were put on hold and others were redesigned to better meet market needs.

Initial plans for a dozen or so residential towers in Poland’s biggest conurbations so far have yielded just one completed project. The 36-story Sea Towers in Gdynia was finished more than two years ago and the developer, Invest Comfort, managed to sell the apartments before the market plummeted. Sea Towers is a complex of two towers standing on a shared base, 141.6 meters tall.

The Sky Tower in Wrocław will be even taller. At 207 meters, it will be the tallest residential tower in Poland. The original plans provided for 900 apartments but this number has since been reduced. The price per sq m in Poland’s tallest apartment tower will range from zl.10,000 to zl.41,000 and completion is planned for the end of 2012.

After a hiatus of almost two years, work has recommenced on the most luxurious building in Warsaw: Złota 44. This tower, a project by Orco Property Group, is scheduled for completion in 2012. It is a luxury building in the heart of Warsaw, in Złota Street, and will stand 192 meters (54 stories) tall. It was designed by the world-famous American architect of Polish descent, Daniel Libeskind. The “glass sail” (as Złota 44 is popularly referred to) will offer the most luxurious and highest-located apartments in Warsaw. It will have 251 apartments of varying sizes.

Towers are only marginal among luxury apartment projects in Warsaw. Several dozen projects were begun here over the past few years. The latest stage of Dom Development’s small-scale Opera project, next to the historical Saxon Garden in Warsaw, is sure to be counted among the most luxurious apartments. The same developer built Grzybowska 4, a large apartment block nearby that residents are currently moving into. Other original Warsaw projects include Rezydencja Piękna Nova by the Magnus Group, Apartamenty Trio by the Eco Group, Restaura Górskiego by Restaura, Nowe Powi¶le by Menolly, Puławska 111 by ECC Real Estate, Belgravia Residence by Belgravia Polska, Rezydencja Foksal by BBI Development, and Klimt House by Echo Investment.

Apartments for rent
Investors all over the world, including Poland, realized a long time ago that buying an apartment downtown is an excellent long-term investment. Many such apartment owners decide to rent out their acquisitions. Apart from the increased value of the real estate itself, which they will cash in on upon selling the apartment one day, they can count on regular income that is often equal to a high-interest bank deposit. “All this encourages more and more investors to buy luxury apartments in city centers,” says Patrycja Kwiatkowska, senior partner at Griffin Real Estate. “The current European real estate rental market situation presents an excellent alternative for tourists; instead of a hotel room, more and more are deciding to live in an apartment.”

Buying a luxury apartment, however, you need to remember about some important factors that make it attractive to a prospective tenant. Apartments close to the city center, spacious and comfortably fitted out, will guarantee that your investment will never lose in value and will always attract tenants.

Kwiatkowska believes that no one deciding to rent out this kind of home need worry about a regular income. Over the past few years many companies have sprung up on the European real estate market that handle luxury accommodation lease management. Their services are usually priced at 20 to 25 percent of the rent. This also applies to Poland; you can buy an apartment for rent without having to worry that it will stand unoccupied. Guaranteed leasing is offered by many companies, including Home Broker and the redNet Property Group.

This year’s Polish presidency of the European Union and the Euro 2012 soccer championship as well as the development of tourism are all sure to contribute to increased interest in the purchase of luxury apartments in the downtown areas of big cities like Warsaw, Cracow, Wrocław or Poznań. Investors who decide to buy an apartment right now can expect a speedier return on their investment in the coming years.


Commentary
Cracow Luxury Apartments Attract Foreigners

Adriana Maruszak, sales director at the Buma Group:

In my opinion, the demand for luxury apartment buildings is independent of market fluctuations; clients always appreciate luxury projects, especially in a city like Cracow. The luxury apartment market in Cracow is developing steadily—the number of young managers and foreign investors is growing, and these are people who appreciate prestige and luxury.

We often focus our range of luxury apartment buildings on a specific, very narrow and demanding group of clients already at the planning stage. One example of such a project are the apartments at 32 Szeroka St. in Cracow. Located in the heart of Kazimierz district, in a historical 16th-century tenement with modern interior design, they offer a unique living space. The Szeroka Street luxury apartments are targeted at people who value comfort and privacy but at the same time enjoy taking advantage of what the city offers in terms of culture. This is the kind of project that foreigners often seek.

Price is a secondary consideration for people looking for a luxury apartment. What counts the most is a prestigious location, living comfort and original architecture. Clients also appreciate it if the project has won prizes in architecture competitions. One example of such a novel luxury project by Buma is Zaułek Onyx in Cracow. Modern architecture with lots of glazing, elegant aluminum window framing and an eye-catching graphite facade have won Zaułek Onyx many architectural awards.
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