CBRE is a US born commercial real estate services and investment company, with more than 100,000 employees in over 100 countries. It is also the largest real estate consultancy in CEE.

You are managing a 400+ people team at the moment, what vision do you bring to CBRE’s strong Polish footprint?

When I joined CBRE, the company was the third or the fourth player in the market. We have gradually expanded the team as well as market share and are currently leaders across the board in the transaction & advisory business. Poland occupies an important part of CBRE’s global map and we are the biggest in our segment in CEE, in terms of both revenue and workforce. It is, of course, our ambition to maintain this enviable position, but we are continuously adjusting and improving our portfolio of services. We doubled in size since I took over and have an appetite to keep that going.

Since you have been at the helm of the company for over ten years now, how have you seen the market transform throughout this period, and what are some noteworthy differences? 

My background is the office sector, and from that perspective the market doubled since the 2008 crisis. There has been rising interest from foreign investors, but the downside to that is that the annual local capital infusion into real estate ranks only at 3-5%. I believe this to be the biggest difference from countries such as the Czech Republic, Slovakia, Romania or Hungary that have up to 30-40% of market share occupied by local investments. This specificity of Poland’s current industry makeover is partly due to the regulatory environment as well as to the weakness of the capital market. 

What do you believe as some regulatory changes that can shift the balance and positively impact the industry?

One important legislative change that the industry is pushing for is the introduction of REIT (real estate investments trusts) structures on the national market, let’s see how this pans out. It is important to note that the commercial real estate sector was neglected by decision makers for a long time and the government is now trying to address the inequality affecting local investors. 

What are the main strongpoints that are contributing to Poland’s impressive success in attracting foreign investors?

The yields are considerably more attractive than in the West, for instance prime office yields are at around 4.6%, compared to 3% and below 3% in Western Europe. From the office segment perspective, most buildings are class A and of the highest quality, and there is a diversified tenant base from international corporations and local businesses alike. Of course, the impact of COVID-19 was felt in Poland as well as everywhere else, but even from this angle the country proved to be quite resilient. 

We have a population of 38 million people raising the bar for real estate demands in the residential and retail segments. This makes Poland very appealing to residential developers, especially with the boom in the buy-to-rent subsegment. Groups like Heimstaden come here to buy thousands of units at once, so I can safely say the enthusiasm for rental is unrelenting. 

The pandemic has affected each segment disproportionately though, could you elaborate on the logistics vs. hotels segments, which saw the most dramatic shift?

Industrial is the clear “winner” of the new setting. The sanitary crisis accelerated behavioral changes in this sector with tenants shifting evermore to e-commerce.  Land prices have gone up, however we still have large parcels of land to be developed on. Domestic consumption will grow, even though currently the sanitary conditions have a slowing effect on the economy. Technology adoption is playing a crucial role here, as it is helping businesses optimize their outputs and facilitate even faster deliveries.

Hotels on the other hand find themselves at a crossroads. Some must face the decision of restructuring, maybe even through divesting, while others are finding ways of financing their ongoing projects with help from their banks. They are all aware of the fact that not doing anything means losing asset value, and most probably choose to embrace short-term solutions like asset-based loans. 

Given your bird’s eye view on other CEE economies, which present most opportunities outside of Poland?

The Czech Republic is definitely very strong in residential. Hungary follows suit, although at a slower pace than our neighbor. Romania is still an unearthed diamond, but there are signs that it will soon catch up.  I can see a massive chunk of local players from Romania, Hungary and the Czech Republic thriving aside foreign investment in real estate, as opposed to Poland where local capital is lacking. 

What are CBRE Poland’s main goals for the next two to three years?

Our ambition is to best support our clients, and together with them create the best places for work, living and invest in this constantly changing environment. Technology, wellness, sustainability are important challenges in the real estate world and as CBRE we would like to lead the changes – a lot is being done, but still we need to join forces and work together to achieve results at least similar to other developed economies.