PAD is the umbrella organization for residential real estate developers in Poland since 2002, counting over 200 member companies. It offers professional and legal support to its members, promoting industry good practices.
You have been at the helm of the Polish Association of Real Estate Developers for over nine years, how have you been supporting your members throughout this time?
Lobbying activities are a natural part of our value proposition, but not the only one. Training and lobbying each make up for around 40%, whereas PR and marketing count for around 20% of PAD’s activities. We issue 10 to 15 reports a year as a reference source for the government and our members. For example, a hot topic in 2020 was how to reach energy efficiency in buildings. For this job we joined forces with top professionals like universities, law firms and other associations.
We also started organizing experience exchange groups where we invited developers to share both problems and solutions with their peers. Ice started to break after these interactions reached the threshold of 100 people. Beforehand such meetings were c-level focused, however thanks to our varied training offers lower-level management have started contacting us on a regular basis. The exchange groups are also open to local and central authorities’ representatives, to help them see where the need for adjustment comes in regarding regulating the real estate market.
Collaborations are particularly impactful in your member-driven business. How did you manage to bring people to work together, in such a traditionally conservative business?
Our membership is quite diverse at this point. We have around 100 small family companies, 75 international corporations, with the rest represented by listed and medium size companies. We are successful in getting them to work together by giving them something first. We share the information which we know has problem-solving potential in the present as well as the immediate future. We are also giving them direct access to market leaders able to convince them of the fact that they are likely to achieve more if they cooperate. Typically, people reciprocate and trust is formed.
Could you highlight two or three main challenges the industry is facing, and ways in which you are trying to address them?
Our number one challenge is going green. Nowadays, green activists notice more sharply the absence of a tree that stood in the way of a concrete building. Balance must be found so that neither the environment nor the end user suffers, eventually. And the solution is attaching more green components to a building. PAD comes in to find new solutions to help the smaller developers reach this balance.
Poland doesn’t have a legal environmental standard for real estate developers to abide by. The applicable regulations set the specifications for building efficiency, but not for environmental sustainability. However, we don’t wait for regulators to tell us what to do. Instead, we created an internal culture of sustainability among our members by training them on how to contribute to reforestation. We have even achieved a Guinness Book record for the biggest man-made hive for insect pollinators in the world!
What other challenges are developers facing, from a regulatory perspective?
Real estate is an industry considered not to contribute a great deal financially to municipal services, be it transportation infrastructure, sewerage, or new schools. However, it is up to the authorities to strike a fair balance between the voting and non-voting taxpayers, or, putting it more clearly, companies and individuals. This is our second challenge: to achieve fairness in taxation by convincing the authorities to charge end users on a number of bought sqm basis.
Every year we put our mark on some 25-30 legislative projects that affect real estate. I am proud to admit that our opinions are considered in almost 80% of the cases, although to a variable extent. It’s not that bad, it shows we must carry on.
Poland is a mature market that is starting to attract much attention but it only has so many sqm…
That would be our third challenge: the lack of investment plots. We highlighted this problem to our government in a report we just issued this past April. Short supply in this area impacts developers’ future planning and profitability, considering that we are getting less in terms of spatial development plans and zoning decisions. In the last five years, the average price for an investment industrial plot went up by 80%. This affects industrial more than other real estate sectors, as warehousing facilities created a steady demand during the pandemic.
What are PAD's top priorities for the next two to three years?
I want to establish our association as a knowledge hub and a platform for coming up with environmentally friendly development solutions. Business knowledge in terms of past mistakes, proposed solutions, or projections is essential for developers to seek and be able to find. Last but not least, we will invite more local and governmental representatives to our thematic groups, hoping to achieve a critical mass able to spread awareness and join efforts to solve the problems that developers are facing today in Poland.
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