The Warsaw Voice » Real Estate » Monthly - December 1, 2014
The Real Estate Voice
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Bright Prospects for Real Estate Market
   
Franz Jurkowitsch, CEO of Warimpex, a Vienna-based real estate development and investment company with a special interest in hotels in Central and Eastern Europe, talks to Andrzej Ratajczyk.

The Polish commercial real estate market, especially the office market, is experiencing a revival. What’s the key reason behind this?

The key factor in the revival of the Polish real estate market is the significant strength of the Polish economy, together with the continued availability of high quality office space, both in Warsaw and also in secondary cities like Cracow, Katowice and £ód¼. The third important factor is that the high level of interest by international investors in Polish real estate is still growing, especially for properties situated in big city central business districts.

Is the boom in the Polish office market going to last? What are the prospects for this market?

Definitely yes. After the impressive growth on the Warsaw market, an upturn both in production and in rental rates is now especially visible in Cracow and Wroc³aw, and also in £ód¼. In the next two years, total office space is expected to increase by 17 percent in Poland and 25 percent in Warsaw, where rental rates are consolidating at a high level.

In summary, the prospects for the Polish real estate market are good, with growth rates varying regionally, in parallel with the economic growth in Poland and in the whole Central and Eastern Europe region.

How do you assess the situation on the real estate investment market? Is Poland still an attractive place to invest in real estate? How does Poland compare with real estate markets in other countries in the region?

During the last few years, Poland has attracted increased interest from international real estate investors. Good locations in Warsaw are constantly attractive. The important factor is that international investors constantly have their eye on Warsaw. This interest was initially focused on Warsaw’s central business district and is now extending to other locations in Warsaw as well as other cities in Poland. The Polish market is advanced compared to other CEE countries. We may even say that Warsaw is already comparable to many Western European cities as an investment market.

Many hotels have sprung up in Poland in recent years. Are there places where new hotels are still needed?

The hotel markets in Warsaw and Cracow are, in principle, near European levels in terms of hotel supply, especially in the superior hotel sector. Here, good hotels are performing very well, for example the Intercontinental Warsaw and andel’s hotel Cracow. In other cities in Poland the demand for new hotels is significantly higher, which is something we have positive experience of in terms of our highly awarded andel’s hotel in £ód¼. The highest potential, all over the country, is still in the affordable 3- and 4-star sector and the budget hotel sector. We also see great potential for lifestyle hotels like our Angelo brand, which has been successfully present in Katowice for the last four years.

Another trend on the Polish hotel market is the growing number of foreign guests. Many sources predict double-digit growth in terms of foreign guests in Polish hotels this year. Regarding new trends on the wider hotel market, which are also visible in Poland, we are seeing increases in prices for all types of hotels. With the continuous development of technology, including better revenue managers, we have noticed further growth in prices.

What projects does Warimpex have under way in Poland? What plans do you have for the future?

Warimpex has two office projects in development in Warsaw and Cracow as well as a very well located development plot in the center of Bia³ystok. Warimpex always has several projects under evaluation across Poland and Poland is and will continue to be one of our most important markets.