A bet on Wola that’s paying off
Many thought Ghelamco had over-reached when it built a big new project in an under-developed part of Warsaw. The decision doesn’t look so bad now.
When Ghelamco decided to build an office tower in Wola district, Warsaw’s real estate market thought the hitherto sensible developer of Belgian origin had taken leave of its senses. Not only was the company proposing a 220m, 49-storey complex with 113,000 sqm of leasable office space, which – in the context of the Warsaw market at the time – was notoriously difficult (you can’t build a tower in stages and wait for each part to lease-up before going on to the next one). They were also proposing to build it in the run-down, post-industrial semiwasteland a few hundred metres west of Rondo ONZ.
To date, of commercial significance, only the Hilton hotel and Warsaw Trade Tower (WTT) had ventured so far outside the comfort zone of Warsaw’s acknowledged business centre, although these were two unique cases. The Hilton was a hotel, so its clientele was transient, and the WTT was an anomaly – built to house the head of Daewoo’s then-enormous operation in Poland before the company went bust.
So on the surface, the fundamentals weren’t encouraging for such a major development. “A lot of my friends told me the project wasn’t going to happen – the building was too big, it was too early and the site was in the middle of nowhere,” Jarosław Zagórski, Commercial & Business Development Director and Member of the Management Board at Ghelamco, told a group of international business journalists recently. “But we believed that this project could be a landmark project and that we could make something out of it. And we did it. In 2016, the building was chosen at MIPIM as the best new office building in the world.”
Fast forward a few years and their decision to locate in Wola looks remarkably prescient. The previously far-flung Rondo Daszyńskiego is now the home of a new metro station and surrounded by towering office buildings in various stages of development. “A brand new business centre of Warsaw is rising right in front of our eyes,” said Jeroen van der Toolen, Ghelamco’s Managing Director CEE. “Offices, hotels, flats, stores, food amenities and attractive public spaces are emerging in the direct vicinity. I think that in the near future the place will become a showcase of the modern capital.”
Most significantly, from the market’s perspective, Ghelamco – together with Madison International Realty, who had taken a part share in the project in 2018 – sold Warsaw Spire to Austrian real estate group Immofinanz for €386m, making it the landmark investment deal of the summer.
After a relatively slow start to 2019, Warsaw’s office market has seen increased activity as the year has progressed, culminating in mBank’s record-breaking 45,600 sqm lease in Menica Legacy Tower over the summer. Demand for space is strong – the Q2 take up figure of 266,000 sqm is a Warsaw office market record. Total office stock in Warsaw exceeded 5.5m sqm at the end of H1 2019 and there is currently over 700,000 sqm of office space under construction.
More capital projects
What now for Ghelamco? Their Warsaw HUB mixed-use scheme, located diagonally across from Warsaw Spire, is leasing-up, with Getin Noble Bank’s 18,500 sqm, seven-year lease and British Bank Standard Chartered’s 3,600 sqm lease (to house its global service centre) as two notable deals. On another side of Rondo Daszyńskiego, the 55,000 sqm Warsaw Unit office tower is also under construction. Away from the office sector, the company has almost completed its luxury residential Foksal 13/15 scheme with 55 apartments ranging from 47-260 sqm.
Ghelamco is also looking outside the capital. After recently completing a project in Kraków, the company has begun preparations for another in the city and is also planning an ambitious mixed-use project in the heart of the New Centre of Łódź. But the developer isn’t forgetting about Warsaw, and will soon reveal other projects in the very centre of the capital.