Keep climbing: CEE Summit 2019

This year’s CEE Summit, co-organised by Poland Today and Real Asset Media, was a success yet again thanks to 60 international experts from all real estate sectors, global investors, CEE market leaders and one Polish mountaineering legend, Krzysztof Wielicki, who crowned the event with a stirring message: “If you don’t try, you’ll never reach the summit.” 

The CEE region is riding the tide of good fortune and strong investments, but with Brexit looming, the disruption of e-commerce, the increased activity of Asian investors and the fight for REITs, investors need to remain watchful, both for opportunities and potential headwinds. Overall, investors remained hopeful as they looked back on 2019’s positive results. 

“It’s absolutely crucial that the Polish market attracts domestic capital,’ said Piotr Mirowski, Senior Partner, Head of Investment Services Poland, Colliers International. “The main challenge is to keep looking for and identifying new sources of capital. But ultimately it’s the domestic investors that will cushion any fall that comes after a market correction.” 

Many thanks to the event partners and patrons for making this gathering possible, as well as for their commitment to the development of the CEE market:

Premium Partners: Panattoni, Europa Capital

Gold Partner: JLL, Colliers International, Reino Partners, Skanska, Berlin Hyp, ECE, Deutsche/Hypo

Gala Partner: Capital Park

Breakout Session Partners: AXI IMMO, HubHub

Patrons: Urban Land Institute, RICS, EPRA, PINK, JP Weber, REIT Polska

Over two days, experts presented findings on this year’s market trends, discussed planned investments and strengthened relationships with potential partners.

Here is what the experts had to say:

Trends show real estate is more of a service or experience rather than a strict asset made of brick.

– Sean Tompkins, Global Chief Executive, RICS

There’s a lot of attractive property here to buy – income-producing property with good leases, good location, good build quality, etc. But the risk for anyone investing in these markets is exit – making sure the investments that are driving liquidity now are going to be here in five or six years.

-Simon Mallinson, Executive Managing Director, EMEA & APAC, Real Capital Analytics (UK)

In the last 10 years, the liquidity situation in the Central European market has improved. But it is still an area that concerns us.

-Robert Martin, Founding Partner, Europa Capital (UK)

We see investors bidding for several projects but not being successful. So there’s also a question of delivery at the end and the ability to spend the money.

-Ingo Martin, Head of International Real Estate & Structured Finance, Deutsche Hypo (Germany)

Logistics is changing and triggering a lot of new opportunities because it’s not only about storing and shipping. We have many new services that are emerging and it’s very difficult to predict what kind of services will be available in two, three years. So the volumes are high and the diversity of buildings is also increasing.

-Artur Mokrzycki, Head of Capital Markets Europe, Panattoni Europe

Wellbeing has long been documented as important to the overall health and functioning of workers. The goal is to create a productive workforce and to lower illness but also to attract and retain workers who are health-orientated.

-Judd Allen, President, Wellness Culture Coaching, Vermont, USA

Revitalisation doesn’t always mean developing a completely new, transformative project. Even buildings that were built 10 years ago can be improved to attract new tenants by, for example, replacing elevators and providing new fixtures.

-Tomasz Trzósło, Managing Director Central Europe, JLL

We started to talk to our neighbours like Browary and Towarowa 22, and in the future, we would like to be connected. We want people to move between other projects and this is a completely new way of thinking about development because you’re not alone. You can’t close your building and keep everyone in your place.

-Kinga Nowakowska, Member of the Management Board & Operations Director, Capital Park

If you don’t try, you’ll never reach the summit.

-Krzysztof Wielicki, mountaineer led the first winter ascent of Mount Everest in 1980

If you strip away the rhetoric and just look at the facts and figures, you can clearly see who won the 2019 parliamentary elections in Poland.

-Marek Matraszek, Chairman, CEC Government Relations

We want people to earn more, but we also want them to have better jobs. We’re encouraging companies to move away from manual labour and automate processes.

-Tadeusz Kościński, Deputy Minister, Ministry of Finance

Although Poland is the preferred market for development because of the low cost of labour, companies are beginning to see other advantages, such as the quality of the people working here, good universities and the big market.

-Justyna Kędzierska-Klukowska, Head of Warsaw Office, Berlin Hyp

We respond to short-term trends in retail by, for example, creating offline and online shopping experiences. But we also need long-term responses to the megatrends, such as changes in transportation, the ageing population and increases in purchasing power.

-Leszek Sikora, Managing Director Poland, ECE Projektmanagement

Out of eight potential cities in Poland, Coventry University chose Wrocław for its branch campus because it’s very successful at attracting large foreign investment and has a reputation as a ‘university’ city. It also has a high demand for ‘work ready’ graduate labour and employers are eager to engage in curriculum development.

-John Dishman, Pro-Vice-Chancellor, Coventry University

Korean investors have been very active in the CEE, but this is not a sudden wave. Asian capital has been coming into the region since the financial crisis.

-Natalie Breen, Global Real Estate Legal Leader, Head of Asia Real Estate Desk, PwC

Private Korean investors are looking to take over existing contracts and new real estate buildings in Poland, and this is based on a long history of investment with Korea. There is also a direct flight between Seoul and Warsaw, so more investors from Asia are coming to Poland.

-Chan Woo Bin, Associate Partner, JP Weber

If you look at the legal systems in the world, we always thought that there’s common law everywhere, but there’s not. China, Korea, Japan and basically continental Europe share the same legal background because these legal systems had been transferred to Asia some hundred years ago.

-Carsten Loll, Partner, Linklaters

Mixed-use projects are all about creating a human-friendly environment and although art and open spaces do not produce income, they add value and additional benefits to a project.

-Breakout Session

When talking to decision-makers about the REITs bill, we must keep repeating good arguments and educating them while steering clear of emotional arguments.

-Małgorzata Kosińska, President, REIT-Polska Association

There are several reasons why REIT regimes are considered to be so helpful for domestic markets. For one, REITs are regulated on the stock market and they have to contribute to the highest levels of disclosure under scrutiny.

-Tobias Steinmann, Director of Public Affairs, EPRA

There needs to be a system of checks and balances which allow investors to safely invest in Poland.

-Karolina Sulma, Head of Legal Department, Skanska Property Poland

We were really lucky on the real estate market, because from the very beginning, there were a lot of international players and advisors, so we grew up in an international society and there were not so many discrepancies as far as knowledge is concerned.

-Dorota Latkowska, Partner, REINO Capital Partners

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Written by: Poland Today Team