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The Warsaw Voice » Special Sections » March 3, 2014
The Real Estate Voice
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National Standards Needed
March 3, 2014   
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Tadeusz Brach, the president of the Institute for Real Estate Management (IREM) Polska, talks to the Voice.

How has real estate management changed in Poland over the past 25 years?
The way it has developed has been affected by several factors. First, the real estate market itself, complete with its dynamics. Second, the state of the Polish economy and the country’s stability. Third, the professional competence of property managers. When talking about the real estate market and its rapid development, you need to remember the early 1990s. The free market economy created an enormous demand for office, retail and warehouse space. Every year since then, there have been hundreds, thousands of square meters of new space that needs to be managed. Properties are increasingly well-organized and have constantly improving facilities, and all that means managers have to know more. As time goes by, new fields of expertise emerge in retail space management and logistics center management. At the same time, know-how emerges about how to find the right mix of tenants for such facilities.

The stability of the real estate market is strictly related to the country’s economy. The more stable the economy, the lower the rate of return on real estate. I can still recall the mid-1990s when rates of return on commercial real estate reached 25 or even 30 percent. That meant that an investment paid for itself in three to four years, but it was also a sign of a very unstable economy. The rate of return on identical properties in Germany or Belgium oscillated between 6 and 7 percent at the time and these are the figures we have in Poland at present.

When it comes to the professional qualifications of property managers, Polish lawmakers realized the importance of real estate at the end of the 1990s and introduced three licensed professions, including that of property manager. But the good times sadly came to an end Dec. 31, 2013, when a law that deregulates a number of professions entered into force. But that’s a subject for a different interview. All I can say is that Poland’s gone from one extreme to another: the bar was set very high when you wanted to obtain a license, and now the profession is fully open and there are no regulations on, for example, qualifications.

What do you think is the main obstacle to the growth of real estate management in Poland?
The development of this market is a complex process that depends on the distinctive features of a given property. When it comes to the management of office, retail and warehouse real estate, these are all very well-developed market segments and obstacles only start showing up in public property management. I could give you a whole list of problems, from insufficient professional qualifications and the absence of appropriate standards to conflicting goals.

What does Poland need to learn? People here still seem a long way from catching up with standards in the United States, for example.
It’s always worth learning more, of course, but you can’t just adopt everything with no questions asked. Every market has its own distinctive features and is governed by different rules. But benefiting from other people’s experience and adopting best practices is certainly worthwhile.

What does your IREM Polska organization do?
The Polish branch provides a training program for Certified Property Managers and has prepared a training program on public property management. We have signed an agreement with the Real Estate University and together we will offer expert training dealing with this market segment. We have started with training for sports property managers. I should mention here that the training makes use of a modern tool that simulates management of specific facilities. Training programs to follow will focus on hotels, educational facilities and church property. Real estate of this kind requires highly expert knowledge.

How do you think the real estate management market will develop in Poland?
After deregulation, each of the seven property manager federations in Poland wants to certify managers by providing training programs of their own. The programs differ greatly in terms of how advanced they are and span anywhere between 40 and 200 hours. I don’t think this is the right way of doing it. You can’t just come up with different local programs. A good idea would be to combine practical knowledge with theory, which means real estate managers should be working closely with universities. They should also develop nationwide training standards.
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