"We see that the capital is much interested in the Polish market, although there was a moment's hesitation"
Jacek Wachowicz, CEO of IMMOBEL Poland in Rzeczpospolita
Interviewed by Adam Roguski
Rz: In September one year will pass since you took over as company president. What are the goals that the Belgian owner set for you and how successful have you been so far in realizing them?
Jacek Wachowicz, CEO of IMMOBEL Poland:
Before taking the helm of the company, I was a member of the Board of Directors of the Belgian IMMOBEL for 1.5 years, therefore I was well acquainted with the projects carried out in Poland. The goals we have formulated with the Management Board of the parent company for the Polish team are, first, successful completion of ongoing projects, i.e. construction of Cedet and Central Point office buildings in Warsaw and revitalisation of Wyspa Spichrzów in Gdańsk. We have also introduced modifications to the team in such a way as to put emphasis on new projects and development of the company on the Polish market in the long run.
In the IMMOBEL report for 2017, I read that the group was doing good in the home country of Belgium, is enthusiastic about development in Luxembourg, France may become the largest market, while in the case of Poland, caution is advised.
I wouldn't take this in a bad way. IMMOBEL has been active in Belgium since 1863, while in Poland the company has had a slightly shorter presence. Therefore, it naturally acts more carefully, all the more so given the fact that it has not always been exactly a piece of cake here. But when two months ago we officially opened Cedet, the president of IMMOBEL stressed very much the fact that the success of the investment is a prerequisite for channelling means and energy into Poland.
The market for commercial real estate in Poland has been growing for years; we do not lack lessees, developers keep building and investors keep buying. What is your take on perspectives for the coming years?
We see that the capital is much interested in the Polish market, although there was a moment's hesitation – partially due to political uncertainty, but even more so because of changes, e.g. in the settlement of VAT, which froze the transactions for half a year. Investors do not like uncertainty. Neither do they want to be surprised with changes made overnight. Nevertheless, I have not heard of anyone withdrawing from Poland due to these two factors. On the contrary, new players appear – from the Middle East, from Asia. Real estate prices are growing and I believe that with the sale of Cedet we will set a new record.
How do you see the future of the office market in Warsaw?
I’m optimistic, provided that macro conditions do not deteriorate, but we have no influence over that. The market of the capital city is strong, developers still have many opportunities there. Developers compete for lessees and lessees for employees, therefore the quality and location of office buildings is growing in importance. Employees want easy access to the building and surroundings for people to spend their leisure time. Strong movement of lessees towards the city centre is noticeable. Good buildings in good locations will defend themselves. Older buildings in worse locations, however, will have problems attracting lessees. But this opens new possibilities – such buildings can be adapted for residential purposes.
How are the projects in Poland going?
First lessees are already moving to Cedet, commercialisation is virtually reaching 100 per cent. We expect to find a long-term investor by the end of the year.
For nearly two months, construction works in the underground part of the Central Point project, located at the intersection of Warsaw’s two metro lines, have been going on. We are planning to deliver this building in mid-2020 but we are already negotiating with potential lessees. We are also revitalising Wyspa Spichrzów in Gdańsk; in the 1st stage of the project, over 100 apartments are built in addition to a 4-star hotel with 240 rooms.
What are your development plans? What are the target cities and market segments?
Warsaw will always be in our focus, but regional markets offer many opportunities as well. Execution of a project in Gdańsk went very well and we have a huge appetite to develop our business there. We are also analysing investment options in Kraków, Wrocław and Poznań, where we have already built two office buildings. As far as real estate segments are concerned, we are interested in the office, residential and hotel market. We are currently carrying out a multi-functional residential-hotel-commercial project in Gdańsk. We specialise – and this is characteristic of the whole IMMOBEL group – in revitalisation, in blending historical urban areas with modern designs. In Brussels, the group completed the Chambon project, which consisted in the renewal of a whole quarter in the city centre.
Similar projects are carried out in Poland, e.g. Koneser, Norblin or Elektrownia Powiśle in Warsaw. Are there opportunities for more such projects in Poland?
Not many such options, in fact, but there are some, even in the city centre of Warsaw. We are keeping an eye on this topic.
One challenge for the industry is the growth of costs and land prices. How does this affect your activities?
Price inflation is a fact that every investor has to face. We did not really experience it with the construction costs of Cedet, but we did with the costs of finishing and space arrangement. In the case of the Central Point, after the holidays period we will select the general contractor for the overground part; currently we are working to optimise the plan and ensure as much savings as possible. As far as land is concerned, the prices have grown, but it’s only natural that you must pay for good locations. It is noticeable, however, that when price expectations of sellers are high, developers do not buy. I do not see a reason why the land prices should keep drastically growing.