The past

The Romans gave us the word ‘office’ from the Latin officium and were early adopters of working-from-home (WFH) in rooms called tablinum.

The first purpose-built office buildings arrived in the 18th Century in London and phrases like ‘office furniture’ and ‘office hours’ have been around for over 150 years. The invention of things like steel frame construction, lifts and electrical installations enabled office buildings to get bigger and more open leading to the first skyscraper in 1885 and the first open plan office layout in 1906, both in the U.S.A.

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

 
Poland’s construction sector – in particular, residential and industrial – is booming. However, rising labour and building-material costs, labour shortages, new tax regulations and issues to do with energy transition all mean that the end-user will be paying more.

Over the past two years, the pandemic has turned our world upside down in so many ways. It put us all in face of almost endless uncertainties, questions, reassessments. It made everyone – at personal and professional level – look once again at the goals we set for ourselves and the paths and strategies we choose to achieve. Sustainability has been the underlying theme in this process: what does it take to live a truly fulfilled and balanced life; what does it take to make our communities, our institutions, our regions and our planet prosper and grow in a manner that does not overburden future generations – with degraded environment, irreversible climate change or the social impacts of economic growth that cares for nothing beyond numbers on individual balance sheets.

 
“What is VUCA?” you ask. It used to be an obscure acronym, first used in 1987 by the US military to describe the new, post-Cold War, multipolar geopolitical reality. Today it’s a trendy term used by the corporate world to describe the reality we live in. Ever since the pandemic broke out, we live in Volatile, Uncertain, Complex and Ambiguous times. What used to be predictable isn’t any longer. Why? Markets (in general) and their sectors such as the construction sector, are multifaceted and can be affected by many different variables such as labour, materials, financing and even so-called acts of God such as wars and pandemics. All of these variables are co-dependent, but when one variable runs amok, in construction for example, investors and general contractors can compensate or accommodate. With the pandemic, we are now witnessing all the variables that affect the construction market running wild. Here is short and simplified rundown of the predicament we find ourselves in today.

New technology, old materials

Recycling materials used to be a common practice in the built environment. Two hundred years ago if you knocked a building down, you just reused as much of the stone, bricks and timber as possible. Today, in the era of steel, concrete and glass structures, we have got into the bad habit of sending almost everything to landfill (only 6% of construction materials are reused in an industry responsible for 40% of CO₂ emissions).

As the world becomes ever more reliant on technology with speed and accuracy, so the need for space to house the support systems that in turn maintain efficiency and the remarkable efficacy of cloud computing increases.

 
Poland has shown strong resilience throughout the pandemic, avoiding some of the economic challenges present in other European locations. The past two years have brought a change to the Polish real-estate market, with growth seen in the residential, logistics – and in particular – the data centre sectors.

By now, most people would have heard about the ‘Great Resignation’ trend that is taking the workforce by storm, leaving organisations across all sectors baffled as they watched their valued talent hit the road.

Accidents at work are very common in the building sector. Statistically, there are several dozen fatal accidents on construction sites in Poland every year. It is usually a result of negligence of employers and employees and their disregard for health and safety rules and regulations. Unfortunately, this trend continues. Despite implementation of innovative solutions by employers and information campaigns aimed at making employers and construction workers aware of the risks involved, the number of accidents does not decrease year by year.  

 
2022 will be the year we’ll long remember. Many of us expected the world to return to normality at the beginning of 2021. Vaccines were starting to roll out, and many executives felt like it would be a matter of a few months before we would all return to the workplace to fully enjoy the friendly kitchen chats and more effective face-to-face solutions to business challenges.

Investors in the CEE region are viewing the Polish real estate market as particularly attractive. Despite Covid, which initially brought uncertainty to the market, we are observing a growing number of transactions where investors are either starting, re-starting or expanding their acquisitions in Poland and are eyeing good yields. Investors are also putting quite some effort into exploring bright new options in the private rental sector (PRS).  So, the future of the Polish real estate market is looking very optimistic.

 
In the previous issue, we presented several tax changes arising from Polski Ład (the Polish Deal). This article discusses important changes from the perspective of financing property development.

For the past 12 months, the Polish construction market witnessed significant increases in the cost of building materials and labour. The present situation is comparable only to 2010-2012, when projects connected with the Euro 2012 football championship and large-scale infrastructure projects cumulated, creating a pricing bubble. This increase came unexpectedly and is a result of overlap of multiple internal and external factors.

Two years ago, with the first attack of the SARS-CoV-2 coronavirus, everything changed. Like a large stone splashing into a pond, the pandemic has set off waves of consequences affecting our lifestyles, our economies and our work patterns. Their scale was initially not obvious, and only now can we gradually form conclusions about the new reality.

Wille Tercja Complex references the architectural heritage of Konstancin. The town dates back to the late 19th century, when Count Potulicki and his family decided to create a garden city in a charming forested area, just south of Warsaw. The next owner, Count Witold Skórzewski, named the village after his mother Constance (Konstancja).

Modern infrastructure is important for the effective operation of small and medium-sized businesses, and medium-sized towns, of which there are over 255 in Poland, need new strategies and ideas for growth and expansion. In 2018, Agencja Rozwoju Przemysłu (ARP S.A., Industrial Development Agency, which has been supporting Polish businesses for over 30 years) launched its Fabryka (‘factory’) programme. This article presents a case study from the programme, the Urbi Ferro office building project in Stalowa Wola. Construction began in January; it is due to be completed by the end of the second quarter of 2023.

 
The rapid growth of Poland’s commercial property market has led to an ever-increasing number of projects being developed, rising interest among customers and increased prices. It has also resulted in a growing focus on the environmental and climate footprint of such properties – one of the major challenges facing the entire sector in the perspective of the coming years.