Editorial Note

This issue of Contact Magazine Online aims to provide a comprehensive overview of the state of the Polish real-estate and construction market.

Last year was not a good one, with low levels of real-estate transactions and construction activity in Poland. BPCC members are reporting a pick-up in market conditions which seems to be accelerating from month to month, yet the uncertainties that held back growth last year remain. A crucial question yet to be answered is the end-state of the post-pandemic return to the office; whether we end up working three days from the office and two from home or two days in the office and three from home will have a massive impact on the supply and demand of office space.

Issues surrounding ESG, in particular the environmental impact of buildings, have become more prominent with the coming into force of the Corporate Sustainability Reporting Directive (CSRD) and the need to gather environmental performance data. Energy usage is a significant part of this, and as a result, older, less energy-efficient buildings are in danger of becoming stranded assets. Corporate tenants are unwilling to lease them, banks are unwilling to finance them.

In this issue of Contact Magazine Online, we offer you plentiful insights into the sector, with three interviews and 16 articles giving a comprehensive market overview from multiple angles.

The interviews…

Wojciech Stec, sustainability director at Cundall Warsaw, talks about the role that technology is playing in decarbonising the construction sector. Lisa Zettlin, general director at CitySpace, says that greater flexibility in office space is a response to the uncertainties surrounding the sharp rise in hybrid work. And Hubert Sójka, executive vice president, Skanska Central Europe, considers the prospects for Poland’s construction market in 2024 and beyond.

Market overview

Investments in commercial real estate in Poland slowed considerably in 2023. How bad was it? Knight Frank’s Dorota Lachowska looks at the numbers. A question on everyone’s lips: How many days of the week does the average Polish office worker work from home? Jakub Zielinski and Mateusz Polkowski at JLL have the answer. It’s probably more than you think – and this will have implications for the pipeline of new builds. Data centres are hot property – but where they will be built depends on factors such as access to green energy. Bartosz Michalski from SEGRO looks at supply and demand in the data-centre market. And Michał Muc and Wojciech Zawierucha from Ceres Management Services in Central and Eastern Europe consider the real-estate markets of the CEE and SEE regions at a time of turbulence and how these can offer a major opportunity for investors.

The ‘E’ from ESG is critical to real estate and construction.

Agnieszka Głuchowska and Ewelina Opłocka at Globalworth Poland argue that renovating existing office buildings makes far more sense environmentally than demolishing old ones to build anew. The threat of asset stranding and lack of sites in prime locations means more and more developers are indeed looking to redevelop existing buildings; Piotr Paśko and Rafał Kran from MDDP discuss the tax implications of doing so. And Piotr Brzózka and Katarzyna Chruślińska from Osborne Clarke consider the importance of green leases from the points of view of landlord and tenant. Green leases are becoming a strategic tool for investors, responding to the EU’s growing ESG expectations and securing the value of real estate as an investment asset, says Aleksander Grabecki at CMS. What does all this mean for the financing of real-estate development? Wioletta Bratoszewska from HSBC suggests that green development may well become the only kind able to attract financing, and discusses the financial instruments aimed at helping firms reduce their carbon footprint. ESG will attract investors say Anna Jarzębowska and Małgorzata Niewińska from CBRE, whose surveys show that sustainability is becoming increasingly important for real estate companies. Ilona Otoka from Cushman & Wakefield says that a lack of market standards, benchmarks and a system of data collection is holding valuers back from factoring ESG risks in property valuations. How all this green building will look in the future is described by Vastint, with a case study focused on its latest development in Gdynia.

Don’t forget the ‘S’ from ESG either!

Daria Glawenda from Turner & Townsend focuses on the office and explains how new ways of working mean that our offices need to be completely redesigned for today’s reality. And engineering firm Arup makes the point that the design, construction and operation of built and natural environment projects shape the way people live their lives.

Regulatory issues that will have a major market impact

Poland does not have Real Estate Investment Trusts; as a result, the vast majority of large commercial real-estate transactions involve foreign investors. However, this may change as the new Polish government is now drafting a bill on REITs, reports Bartosz Boenigk from Linklaters Warsaw. Finaly, Piotr Staniszewski from Dentons analyses the major overhaul of the Polish land-use system, and what it means for developers, landowners and other stakeholders.