The ‘right’ side of the river
New development based on revitalisation, the new subway line and the National Stadium is spurring Praga’s comeback
The long-neglected Praga Północ and Praga Południe districts located on the east side of the Vistula, just across the river from the centre of Warsaw, are rich with opportunities for further real estate investment, said participants at Poland Today’s Primetime Warsaw III conference, held at the National Stadium in April. Recent infrastructure improvements, notably the opening of the central stretch of the second subway line, have given new life to the area, collectively known simply as ‘Praga’. However, for this potential-laden portion of the Polish capital to fully bloom, it will need to continue to combat its negative reputation.
An authentic city
Conference participants pointed out that Praga was not nearly as heavily damaged in World War II as the districts of Warsaw located on the left bank of the Vistula – many of the historic prewar buildings in Praga have been preserved. Therefore its architecture, along with its location just across the river from the city centre, make this densely built-up area attractive for both investment and daily life, said Warsaw Deputy Mayor Michał Olszewski. He admitted, however, that Praga still is not receiving the attention it deserves.
According to Rafał Szczepański, vice president of the management board at developer BBI Development, Praga possesses the fundamentals that will enable it to develop rapidly in the coming years. For example it already boasts authentic urban tissue – with its streets and public squares – one of the most difficult elements of a city to develop. Within 10 years, revitalized historic tenement houses in Praga will be attracting plenty of interest, Szczepański argued. The first major changes have already taken place. The National Stadium, which was built as part of the preparations for the 2012 European football championships that Poland co-hosted with Ukraine, has become a new landmark of eastern Warsaw. Rafał Rosiejak, head of conferencing and exhibitions at the National Stadium, said that the hundreds of business events held at the facility last year attracted about a million people in total.
Warsaw City Hall is now planning a huge revitalization scheme for Praga which is valued at about 1.4bn zloty and will cover a number of neglected neighbourhoods located in the Praga Północ, Praga Południe and Targówek districts. Many of the existing residential buildings in those neighbourhoods will be modernized. Szczepański said he hopes there will be various types of housing developed in Praga, so that it will see a return of the middle class.
Room for more
Anna Kicińska, a partner and Central European real estate expert at EY, said she believes Praga could become a major office market. According to EY data, there is now only around 200,000 sqm of office space in the eastern part of Warsaw, which accounts for around 5% of the combined office stock in the city. Most of the space is located in relatively old buildings, Kicińska said. She added that a few years ago, one of the banks in Poland was considering moving its headquarters to Praga. In the end however, the company had to abandon the idea because it could not find a proper office building there.
Tenants from the creative services sector, including publishing firms and PR agencies, could be interested in having their offices in Praga. Also, companies from the business process outsourcing and shared service centre sectors could help fill office space in new buildings there, Kicińska said. Large-scale office projects are expected to be developed in the near future in the Port Praski area of Praga Północ. Construction on the Centrum Praskie Koneser mixed-use scheme is already underway in the district. More developments will likely appear as the process of revitalizing Praga proceeds. Krzysztof Wilczek, a regional director at developer Skanska Property Poland, said that while his company was not considering building offices there now, it would be interested in doing so in the medium-term.
Both Wilczek and Szczepański stressed the importance of the second subway line for the future development of new real estate projects in Praga. The recently delivered central stretch of the line connects Praga Północ to the Wola district, which lies to the west of the city centre. Wilczek pointed out that due to the subway line, Praga can avoid the traffic problems that afflict the popular Służewiec Przemysłowy business area of the Mokotów district of Warsaw.
According to Krzysztof Fijałkowski, a development manager at developer ECE Projektmanagement Polska, there is also the potential for the development of new retail projects, including high-street retail schemes. Fijałkowski noted that Praga has a long tradition of retail trade, especially when it comes to streets such as Targowa and Ząbkowska.
Challenging the stereotype
To attract new real estate investments and new middle-class residents to the eastern bank, city authorities, residents and the area’s current investors will have to battle the stereotype that Praga is the ‘bad side of town’. Wilczek said that new landmark investments in Praga, including the National Stadium and the second subway line, are already helping to challenge that image. Kicińska added that the revitalisation process will be crucial for generating investor interest.
So development is moving forward and a positive image of Praga is gaining momentum. With that in mind, Szczepański concluded on an optimistic note. “The money invested in Praga will bring return,” he said. The only question is how big that return will be.
NEW PROJECTS COMING TO PRAGA
Praga does not offer as many easily redeveloped vacant or post-industrial plots of land as the popular Wola district does. Nonetheless, there are a number of very attractive sites there that are expected to soon house new residential, office and retail projects. The Port Praski area of the Praga Północ district is already seeing the development of new housing schemes. However, the real changes will come in a few years when construction launches on new office towers next to the new subway stop near the National Stadium. BBI Development and Liebrecht & Wood are already working on their Centrum Praskie Koneser mixed-use project, which will involve the revitalization of a former vodka factory and will include residential, office, retail and cultural space. A similar development is currently being planned by developer OKAM Capital, which has recently purchased the former Pollena factory site in Praga Północ. A project called Bohema will involve the delivery of new retail, cultural and residential space there.