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52
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52 (147) 2022

Editorial note

Editorial Note

Editorial Note, by Michael Dembinski, chief advisor, and Dorota Kierbiedź, membership director, BPCC
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This is the hardest editorial note I’ve ever written in my 35 years editing business magazines. It is difficult to focus on writing about Poland’s real-estate and construction sector when Russia has unleashed an invasion of our neighbour. The long-term implications for the security and economy of our region will be immense – the reconstruction of Central and Eastern Europe both physically and politically awaits. But in the short term, we can but hope and pray for a swift and bloodless resolution to war, unlikely though that seems at this moment.

The implications will affect the supply and demand sides of every aspect of the Polish economy, beginning with labour through to energy and food. Having battled a pandemic for two years, we all now have to live with geopolitical uncertainty across our region on a level unseen since the early years of the Cold War, something very few of us remember.

Most of the interviews and articles in this issue of Contact Magazine Online were written before Russia invaded Ukraine on 24 February 2022, a date that will become as infamous as 1 September 1939. Some pieces have been revised; others make mention of the threat. But taken together as a body of work, these articles stand as a collective overview of the state of the Polish real estate and construction market, looking at every aspect – supply and demand, HR, financial, technical and legal – as it stood at the beginning of 2022. Forward-looking statements will have to be tempered with the knowledge that we don’t know how this situation will resolve.

With that in mind, I would ask you to take a long, in-depth read of Contact Magazine Online, which will provide practical insight into the market.
 
The Interviews:

Mateusz Bonca, CEO of JLL in Poland, talks about the prospects for the real-estate sector in Poland in 2022 and beyond.

Magdalena Szulc, managing director, Central Europe, for SEGRO, discusses the dynamically developing logistics-space sector in Poland, and the factors that are shaping it – green transformation, e-commerce and technology.

Dominik Leszczyński, CEO of DL Invest Group, describes how his company has become a Polish national champion in real-estate development.

The Big Picture – industry overviews

Jacek Kostrzewski, managing director of Gleeds Polska, asks whether next the months will treat the construction industry kindly. It shrugged off the pandemic, but the invasion of Ukraine will create a new set of challenges. The future, he says, has to happen in way that is responsible and thoughtful, focused not only on profit but also on the people who make it happen and the environment within which it happens.

Ian Scattergood, partner, Office Agency, Cushman & Wakefield, Warsaw, looks at the factors – accelerated by the pandemic and advancing technology – that will shape the future of demand for office space. To what extent has the working from home (WFH) revolution changed everything?

Stabilisation and economic growth should have a positive impact on Warsaw’s office market, says Karol Grejbus of Savills. After almost two years of pandemic, the situation in the office market is stabilising and business has learned to operate in the new reality.

A boom, with evident risks, is how Dr Maria Sipińska-Małaszyńska, CEO of MSM Design, assesses Poland’s construction sector. She considers the effects of rising labour and building-material costs, labour shortages, new tax regulations and issues to do with energy transition – all of this means that the end-user will be paying more.

Real estate, the environment and sustainability

How will ESG (environment/society/governance) affect the real-estate market? The built environment, responsible for 40% of all greenhouse-gas emissions, is a crucial sector in the fight against climate change. Marcin Malmon and Klaudia Kowalczyk, from KPMG consider the regulatory and market changes that will affect the sector.

Banks will be unwilling to loan money to developers unless their projects meet the most stringent sustainability criteria, says Wioletta Bratoszewska, real estate finance director, HSBC in Poland. This will eventually result in a ‘re-imagining’ of buildings, in line with the EU’s Green Deal.

We are living in times of VUCA, according to Christopher Siemieński from Skanska SA, Volatile, Uncertain, Complex and Ambiguous times. What used to be predictable isn’t any longer. With strong demand and supply-chain issues, he considers need for a circular economy, based on the recycling and reuse of construction materials. The future is a digital, circular construction process

Arups’ Kristian Winther puts together new technology and old materials. Two hundred years ago if you knocked a building down, you reused as much of the stone, bricks and timber as possible. Today, in an era of steel, concrete and glass structures, we send almost everything to landfill (only 6% of construction materials are reused in an industry responsible for 40% of CO2 emissions), he says.

How can you tell whether a building is as 'green' as its developers claim it is? Katarzyna Minkiewicz from Atlas Ward Polska, explains that it all boils down to certification. If it's BREAM, it is green.

Understanding ‘sustainability’– Barry McDermott and Alina Sikora from PM Group take an in-depth look at sustainable building and point out the long-term benefits for businesses that chose a truly green building.

The drive to invigorate Poland’s smaller towns is being spearheaded by ARP S.A. – Poland’s industrial development agency. Its Fabryka (‘factory’) programme is bringing high-quality office and services space to towns like Stalowa Wola, to kick off new investments, attracted by generous grants and loans.

Construction and technology…

Alvise Simondetti from Arup and Julius Sustarevas from University College London ask whether autonomous robots make construction more sustainable. Early experience with robots empowered by machine learning shows they can use materials more precisely than humans and avoid waste, while continuously monitoring and repairing as necessary.

…Technology and construction

Another structural change facing the sector is the emergence of a new type of building – the data centre. As the world becomes ever more reliant on tech, so the need for space to house the support systems that maintain cloud computing increases. Chris Lowe MRICS from Trebbi Polska asks whether Poland is set to become a hub for data centres.

Tomasz Łosek from Turner & Townsend confirms that the past two years of the pandemic has seen spectacular growth in the data centre sector, and that the next four years will see a doubling in capacity. Retrofitting existing industrial space is less carbon-hungry than new-build, he says.
               
HR aspects of real estate and construction

We are living in a world where ‘full-remote’ is becoming an increasingly popular form of employment, with companies in one jurisdiction taking on employees in another. But how to manage this legal, from the point of view of tax, social security, pensions and holiday pay? Here is one practical answer, from Brendon Silver, CEO of Playback.    

Re-imagining the workplace is also on the mind of Pawel Ornatek, country manager Poland, IWG. Some form of hybrid working will come dominate. Firms will need to respond by redesigning their property strategies. Commuting – disliked by most – needs to be curtailed. What’s the answer?

Accidents at work are common in the building sector with several dozen fatal accidents on construction sites in Poland every year, usually a result of negligence of employers and employees and their disregard for health and safety regulations. Kinga Ciosk and Bartosz Wszeborowski from PCS Paruch, consider what needs to be done to improve the situation.
 
Recruiting real-estate specialists is becoming increasingly difficult in an employees’ market. If you seek such people for your team, here are some aspects you should consider. By PropertyTalents.

Polish Deal (Polski ład) and real-estate investment

A major tax reform was launched by the Polish government on 1 January 2022 – the Polish Deal (Polski ład). Tomasz Krasowski and Marcin Czajkowski, from Dentons present their overview of how the changes will affect the Polish real-estate market.

Bartosz Clemenz and Antoni Cypryjański from Hogan Lovells, focus on two aspects of the Polish Deal – Houses without Formalities, and Houses without Contributions, to assess their impact on the residential real-estate market in Poland.

Considering the Polish Deal from the perspective of financing property development is Justyna Bauta-Szostak, tax advisor at law firm MDDP Michalik Dłuska Dziedzic i Partnerzy. She presents an overview of the most important changes.

Legal issues to consider

For the past 12 months, the Polish construction market has seen significant increases in the cost of building materials and labour. Piotr Staniszewski, partner, Real Estate Poland, Dentons looks at the impact of rising construction costs on construction contract negotiations.

Maciej Boryczko and Piotr Tracz at Gessel Attorneys at law consider how landlord-tenant relations have been affected by the pandemic, now that we can see how it has affected our lifestyles, our economies and our work patterns. Now can we gradually form conclusions about the new reality.

Grzegorz Witczak, from TGC Corporate Lawyers, says that new residential investments regulations will make life harder for developers, whilst aiming to improve legal protection of buyers of residential units and single-family houses.

And finally - some real estate for you?

High-end residential property on the outskirts of Warsaw is in vogue once again. Here’s a development by BPCC member Mix Group – Wille Tercja – a luxurious apartment complex in beautiful Konstancin-Jeziorna.

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