Warsaw Property Partners (WPP) is a Warsaw based, Polish capital company that offers real estate investment services such as asset & property management, development management and transactional consultancy. Their transaction track record is filled with landmark buildings such as Spektrum Tower, Radisson Collection Hotel or K1 Office Krakow.
WPP started off with asset management, but recently is also putting more focus towards investment management. What is guiding the new strategy?
It's always difficult to distinguish the line between property management, asset management and investment management. Sometimes we co-invest in such a way that we are the local operating partners responsible for creating and delivering results on a business plan. We took this approach because there is demand in the market for these services and since I've been on the other side of the fence of co-investment vehicles in the past, we can understand the needs and provide perfectly tailored solutions for investors.
You work across a few different sectors: office, residential and hospitality - how is your portfolio divided between these three segments?
Our portfolio is now dominated by the office sector, but we do also have clients in the warehouse and logistics sector and ongoing project management ventures for hotels in Warsaw. We're working hard to expand into the residential-for-rent sector and we've recently put ra lot of effort into this plan. We are closely following the requirements of our clients who show more and more interest in this sector, which looks very promising in Poland.
In Poland as well as in Romania the residential-for-rent concept is gaining traction, although both countries are known for their "property owners" culture. What has changed in recent years?
This is an excellent question that everybody is trying to find the answer to. In my opinion, there is a combination of a few factors: massive migration (domestic & foreign) towards large cities due to better wages and the affordability of the rent, which is sometimes easier to manage than the high deposits required to buy a new house. Also, younger people prefer to have a certain flexibility and be able to change their apartment with ease, and this flexibility isn’t that big if you decide to buy your own house.
Talking about investors, who tends to invest in the Polish real estate sector in your experience?
Players' characteristics are everchanging, but traditional investors are usually from Austria, Germany, the UK, sporadically France and the USA, and pre-pandemic there were some Asian investments. Our business should benefit from elifting of travel restrictions and investors’ ability to again come to see properties in foreign countries.
Most probably the continuous economic growth is one of the main factors that make Poland so attractive. Moreover, it is the biggest market in CEE, it is quite well developed, and it has a 20-year history of real estate capital markets.
The fact that new opportunities arise every day is contributing to the overall excellent reputation of the country as it converges with the Western European standards. There are some temporary political hiccups, but fortunately the economy keeps going forward and the market remains stable enough so that advantages overcome challenges.
What are some of the challenges that a company like WPP can face on the Polish market?
These problems are no different to the CEE or even the entire world. The relationship with authorities (e.g., planning, zoning, agreements, etc.) is always a challenge and you always need to have your troops on the ground to successfully mitigate it. In the future, services like ours are going to be so much sought-after exactly because without a local partner, it's almost impossible to conduct a fruitful real estate business in a foreign market.
What is your process when deciding if a project is worth investing in?
I believe there is a combination of over 20 years active presence in the market of WPP’s partners and the contact base we managed to establish in Poland during that time. We have access to off-market deals and we also receive requests for support in real estate investments directly from interested investors.
The first criteria we asses when looking at a deal is the location, followed by pricing and the market demand towards the project (e.g. we see now demand for residential and we follow that trend). Our combined background offers us experience in a full spectrum of property business. Today the name of the game seems to be PRS, and not necessarily retail, so we are going to precisely follow the trend and take advantage of it.
If we are to look at WPP's short and medium-term plans, what are you working to achieve with priority?
We definitely intend to continue growing our services in property & asset management but we want to remain a nimble organization, that is able to react quickly. Since only me and the two other partners at WPP manage clients’ investments with personal involvement, , we to work with only a limited number of clients. At the moment our focus isg to expand our capacity in managing, leasing and investor reporting in the PRS business.
Do you have a final message about the Polish real estate market?
There is a good story to be told about the Polish real estate market. At this point in time, Poland is between the opportunities of an emerging market and the security of a fully developed mature market. We're happy to help anyone who's willing to jump on the bandwagon and start investing here.
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