It’s become pretty commonplace to say that Warsaw’s office market is in trouble, that the pipeline is just too big and that the country’s economic boom was all just an offshoot of a binge of EU-funded road-building. The truth will turn out to be far more subtle and complex.
As we’ve been told ad naseum, Poland is long in smart, ambitious young people with highly marketable skills in finance, technology and languages, it’s also just plain big. European-big. And this is part of the reason the Warsaw Stock Exchange has quietly become one of the more attractive markets in Europe. Immofinanz didn’t just double-list there for marketing purposes, after all. It wants Polish pension fund money.
Anyway, the next time someone tells you Warsaw’s office market is past its peak, send them to links like this article.
Record stock sales and a growing economy are helping Poland solidify its position as central Europe’s busiest financial center, even as euro-area neighbors struggle to shake the sovereign-debt crisis. UniCredit SpA (UCG), JPMorgan Chase & Co. (JPM) and Societe Generale SA (GLE) are establishing investment-banking hubs in Warsaw, where equity sales of 15 billion zloty ($4.6 billion) this year exceed the $490 million in the rest of central Europe.
Get it? If that doesn’t make the doomsayers think twice, give them the link to this article: SocGen’s Russian Unit Said to Cut Hundreds of Jobs in Moscow.
Not bad news at all for Warsaw. Confirming an ongoing trend in which the Polish capital is becoming the financial center of CEE, UniCredit has just announced it will be making the city its regional hub. Office developers will be rubbing their hands in anticipation at the news, because the company will be hiring lots of people to make this happen. Fox has the full story:
Unicredit CAIB Poland will handle all central European business with the exception of Turkey and Russia, Jacek Radziwilski said, adding that the Warsaw office will address more local client needs. The Unicredit subsidiary includes a brokerage, corporate finance arm and capital markets unit.
“The situation on global capital markets means many people are moving,” Radziwilski said, when asked whether it would be hard to convince potential employees to move to Warsaw. “Lots of people in the City [of London] are looking for work right now.”
HB Reavis continues to make inroads into Poland. The latest scalp was for the Slovak-based developer is a win in a pair of land tenders for over 17,000 sqm of land in central Warsaw. Polcom Investments, part of the HB Reavis Group will take over the land plus buildings on Chmielna Street. The total transaction value was PLN 171m. Cushman & Wakefield organized the tender for the vendor.
When Kulczyk Investments tried to get its plans for Chmielna Tower through the urban planning process back in 2007, it got rejected by the Civil Aviation Office (CAO) which objected to its planned height of over 280 meters (antenna included).
In fact, Gazeta Wyborcza
reports that in view of its proximity to Warsaw’s airport, the agency set the maximum height at that location at 130 meters. But the developer refused to compromise on its original plan, and the approach now appears to be paying off, after a recent u-turn by the CAO. Chmielna Tower has been given clearance to take off, meaning that construction could begin within two years. The company is currently carrying out the project on its own, but it’s expected that Chmielna Tower, which would be Warsaw’s tallest building, will be placed in a joint venture between Kulczyk Investments and US giant Silverstein, to be called Kulczyk Silverstein Properties.
Europa Fund II and Warimpex Finanz have sold the Jan III Sobieski Hotel in Warsaw, along with a 6,000 sqm sqm office building to the Norwegian-based investment company Wenaasgruppen. The sale price is being reported “in excess of €50m.” The transaction is Wenaasgruppen’s first hotel purchase in Poland.
“This sale takes place after the successful fulfilment of a five-year business plan. We have accomplished a substantial renovation of the hotel and, together with Warimpex and Vienna International Hotelmanagement AG, significantly improved the hotel performance during those five years,” commented Simon Hooper, Partner at Europa Capital.
Inpro focusing on luxury investments
The developer Inpro closed the second quarter of 2011 with a loss of PLN 322m, however it intends to deliver additional office space and a luxury hotel. It’s increasing its exposure to commercial property with projects planned in Poland’s regional cities. It’s received a construction permit for two new office projects in Gdansk that are located near Park City, one of Inpro’s housing investments. The company is looking to add to its land bank and will be concentrating on Bydgoszcz, Warsaw, Toruń and Poznań to do so.
PLN 40m amusement park planned for Warsaw
The investor La Palm is planning to develop an amusement park called Adventure World Warsaw. Claiming inspiration from Disneyland parks, this new scheme in Grodzisk Mazowiecki is believed to be an investment of €400m, with 800 rooms provided by two hotels and a retail component. Construction is expected to start in spring 2012 with completion set for 2014.
Interesting article in the FT that pretends to be about how the Viennese owners of the Prague stock are planning, someday, to try to make it less of a loser compared with Warsaw’s booming bourse. The reality is that Warsaw is CEE’s financial center, of course. But the article’s a must-read because of the background info about how Czech politicians and regulators botched their chance to provide a local alternative for raising capital (as opposed to just borrowing from banks). Continue reading