Warsaw, via Sydney, born & bred
From fitout to future of the real estate market, Rajmund Węgrzynek shares his insights.
How did you find Poland when you came back from Australia?
It was a time when we had a lot of political problems. There was also the question of whether to join the European Union or not. People didn’t know which way to go. Sometimes former communists were running the country, sometimes liberals – nobody knew what would happen. But I saw huge potential, whereas in Australia everything was already established. When I came to Poland 16-17 years ago, I thought everything would be completed in 5-10 years, but now it’s almost 20 years and I see even more potential for Poland and Polish people than I saw before. And I’m not just talking about real estate. Poles are leaving behind the ghosts of the past, of the World War II. My kids don’t have the types of memories we have. Our grandparents used to talk a lot about the war, about the Germans and the Russians. My two daughters are proud to be both Poles and Europeans. But there’s still a lot to do in almost every field. We have a lot to improve and a lot to achieve. There’s a lot I didn’t notice before, when I was only thinking about my business, but as you get older you understand much more about politics, business and society. Business can’t only be run just as business – it’s a part of society, even of culture. Now people who have become millionaires understand they need to put something back into society. That’s how we’re changing.
What does Warsaw mean to you?
I was born in the old part of Mokotów. I feel I was born in the right place at the right time. The city is like a small New York – there are lots of opportunities for anyone who wants to succeed, and it’s changing every 24 hours. I live 300m away from Warsaw Spire. This was once the middle of the ghetto. During World War II, my grandfather fought here. It’s so important for me to see it develop. It’s also important for Jewish people. From my window I can see the buses of young people from Israel coming on tours. For Jews, for Poles, it’s a place of history. Our grandparents rebuilt the city from nothing, so we can’t complain. We are extremely lucky.
Moving away from history and onto business, what’s your definition of fitout?
Fitout is to do with internal space – it doesn’t matter if it’s an office, a private house, school, theatre, opera – fitout means doing the internal work of a building. The shell and core are just concrete, but internally it’s always changing as the tenants or operators change.
Fitout was the new ‘big thing’ in real estate starting a couple of years ago. Before that it was sustainability. Now it’s PropTech. Is there some truth in that?
(Fitout) has been around longer than two years. Recognition of the importance of fitout is more like six – eight years. For the last two years we’ve tried to become recognised as a ‘general interior contractor.’ A lot of American companies do construction management. They don’t have a general contractor to do the whole thing but split the work into packages. There’s someone to do the structure, someone to do the facade, someone else does the insulation. It all depends on how big the developer is. The big ones will always do it in packages because they don’t want someone else having greater control of the project than themselves. They think they can do it cheaper that way, but then they have to employ lots of people internally to coordinate it all. When developers tell me they can do fitout cheaper internally, maybe on the building side it is cheaper, but I don’t know who’s counting their overheads.
What concerns you about the future of the real estate market in Poland?
Developers are planning to release a lot of space to the market in the next couple of years. But how can they do three times more than they used to do, with the same resources? There are not so many construction workers on the market. A solution has to be found for this. Developers know how to commercialise the buildings, but then they have to make sure the work is done on time. Margins will disappear. Poland has been running out of labour for at least two years. I say to developers: you can have a client, you can have cheap land, you can have a project, but who’s going to build it for you? It’s a huge problem. For a few months now, Ukrainians have been able to go to other countries in Western Europe. They’re not supposed to be able to work there, but of course in reality they do. And there’s another element. We’ve only used about 10-15% of eligible EU funds. The rest still needs to be processed.
Do you mean that if this EU money is going to be utilised, then there will be a splurge in structural spending and labour will be needed for this?
What is the solution?
We have to be smarter in our relations with Ukraine and other countries to the east. We have to give them a really good opportunity in this country. Things have already started to change. Banks have products for Ukrainians, and they have a television station here. They have to feel that Poland is their second home. So even if they can make more money in Western Europe, they prefer to stay here. Language and culture is important, as well as proximity to home. But if people don’t feel comfortable, they won’t stay. I’m not only talking about labourers here – there are also engineers, specialists in their fields. Tétris takes benefit from the workforce of numerous Ukrainians. Some have been working for us for 10 years. Some of them are bosses. We are not paying them less than the Polish guys, we pay them the same money. They need to be paid well and on time. But the government is not helping with their procedures, which take a lot of time. Ukrainians should not have to wait for their visa and work permit for three-four months.
Is the government addressing the issue?
The government spends too much time on history. Instead they should be thinking about what can be done if we don’t have the labour.
What will happen if Poland doesn’t have this labour?
It’s not a little problem. EU funds are not released forever.
If Poland wants to use labour from Ukraine, doesn’t that cause problems in Ukraine?
Until Ukraine eradicates corruption, Poland will offer a better alternative for its workforce. The Polish government needs to improve relations with Ukraine because once it joins the EU – and I don’t think this is wishful thinking – Poland will have a big advantage. This is exactly what Germany did with Poland. Ukraine is not Russia. They have a different type of democracy. The Polish government and the Polish people have the opportunity to show them how to do good business and to make honest money. This is a huge opportunity also for Poland.
Rajmund Węgrzynek runs, together with Paweł Brodzik, the Polish division of Tétris, a fitout company operating across Europe. He was born in Warsaw during the tail end of the communist period. After several summers working on construction sites in London during his school holidays, he headed to Australia in the late 80s and set up his own construction company in Sydney. In the late 90s, he decided to head back to Warsaw with the aim of doing business in the ‘new Poland