Inflight Magazine of Brussels Airlines

Polishing up a treat

A country with mouthwatering real estate potential, Poland’s no-nonsense approach to residential tourism in Warsaw and Krakow is hitting the investment spot just nicely. Laura Henderson reports

For an ex-Soviet satellite state that tasted freedom only as recently as 1989, Poland’s realpolitik chutzpah is to be admired. Now one of the most successful transitional economies in Europe, the arrival of designer capitalism in this Eastern bloc heartland has been swift and dramatic –heritage towns are absorbing an influx of city slickers, while age-old hamlets, untouched by progress, steel themselves for a holiday home gold-rush. EU accession in 2004 has attracted significant foreign investment, with a confident banking sector, young urbanising population and blue-chip presence completing the cocktail for growth. Ranked fifth in the global FDI index, which assesses how likely investors are to divert capital into a country, Poland’s long-term economic performance also looks set to outshine many of its EU rivals. Judi Williams, of Property Frontiers, explains: “As a country, Poland is attracting enormous interest from pure investment buyers, with economic growth at over 5% and property prices rising in the region of 10% per annum, higher in key cities.” Domestic appetite for ownership is also gaining momentum. “With an emerging indigenous middle-class and a widening portfolio of new-build developments around the major cities, the wealth to both rent and to buy is increasing,” adds Louis Mann, of Validus. As to best investment buys, “most agents will advise either off-plan or old”, suggests Mann. “Character properties are an excellent choice, with turn-of-the-century city apartments holding their value well. Buyers, however, should look carefully at the potential supply/demand matrix in each micro location. Poland is a good bet for capital growth, but can be less so for those seeking a secure, high-income stream.”

Warsaw

Seventeen years after the fall of communism, any lingering traces of the Soviet era in the heart of the capital are hard to spot – and those signs that do remain are limited to the suburban swathes to the east. Most of the city’s attractions lie on the west bank of the Vistula River, an enlightened atmosphere of cafés, green spaces and museums thronging with life. Residential property is rising by an average of 15%, with some of the fancier districts reaching 30%, and demand for ‘let-friendly’ two-bed apartments has overtaken prestige penthouses. “Rental yields of upwards of 10% are typical,” confirms John Osborne, of Osborne Property. Gearing up to buy is also straightforward, confirms off-plan investor Peter Richardson: “The mortgage market is now established, with loans available over a 30-year term and fixed-rate lending being introduced.” Warsaw’s other draw card is access, with upwards of seven million passengers a year into its airport and Terminal Two now under construction. Prime districts include Bialoleka and Wesola, together with Ursynow, while Saska Kepa and Upper Mokotow are growing in popularity with younger buyers; tastefully renovated redbrick villas with secluded gardens sell for upwards of €250,000.

Wilanow, one of the most sought-after districts to the south of the city centre, gained its chi-chi status from King Jan III Sobieski, a charismatic leader revered for his victories over the Ottoman Empire, who went on to build a grand summer residence there. Favoured by diplomats and expats, easy access to the centre and a small, but burgeoning collection of high-end, gated communities are now catching the attention of overseas buyers.

Wilanowska is a case in point – an architecturally striking development comprising one, two and three-bedroom apartments, solar water-heating, cable TV, internet and videophone access fitted as standard in all units. Due to complete in 2008, one-bed apartments with Validus start from €90,000, rising to €190,000 for a three-bed penthouse. A landmark structure and a new icon in the heart of the city centre is Zlota 44, designed by Daniel Libeskind, the architect behind the new World Trade Centre ‘Freedom Tower’ in New York. It comprises 251 apartments, including spacious four-bed penthouses with rooftop terrace city views. Resident facilities include 24-hour concierge, massage and spa therapies, state-of-the-art gym and yoga rooms, and a private function suite. One-bed apartments with Validus start from €385,560, rising to €3.68m for a penthouse suite.

Krakow

Poland’s one-time royal capital – and, now, resurgent tourist destination – has an enviable holidaymaker to homebuyer conversion rate. Located in Malopolska, the most prominent of Poland’s 16 regions, the city’s attractions are manifest – a chequered feast of towers, intricate courtyards and a green-belt Oval City Park. “The record number of tourists visiting the city [up by over 25% in 2006] means the short-term accommodation market is very buoyant,” confirms Mann. “Popular districts include the Stare Miasto [Old Town] and Kazimierz [Jewish Quarter]. The latter is a lot less crowded, with a bohemian feel to it.”

Apartments are the property staple, mostly period residence conversions with classic features, such as wooden panelling and high ceilings. The Golden Gate Project, close to the Old Town and the Jewish Quarter, on Cystersow Street, offers apartments set in secluded gardens from €92,400 and is set to be completed in May 2008. Long-term student rentals are also plentiful, with average yields of between 6%-8%.

Up-and-coming districts include leafy Rakowice and Kleparz, as well as Debniki to the southwest; a good bet for small villas and post-war town houses. Far from relying on foreign visitors, however, Krakow also has a solid economic base of its own (engineering, services, telecoms), part of a pro-investment policy to develop long-term growth prospects as tourism levels increase. Located in Wola Duchacka, south of the city centre, Sunny Hill is a stylish, mixed-residence development, with views over the Tatra Mountains. One-bed units start from €80,000, rising to €90,000 for two-bed units, with Property Secrets. An eye-catching alternative on the site of a textile factory is Vistula. Due to complete in 2009, one-bed apartments with Leach & Co Property Consultants start from €145,000. Leaseback options are also available.

Fact attack

A homebuyer’s survey is not an integral part of the purchase process, although you can commission a report from a licensed builder

Mortgages are available up to 80% and for terms of up to 30 years

Agency fees are in the region of 2.5%-3%

Stamp duty is 2%

Real estate tax has a government ceiling of PLN 0.57m² from January 2007 for residential property

The current rate of VAT on new-build is 7%. The next anticipated change to VAT is the introduction of a 22% rate on new-build in January 2008

Tax on rental income is payable on a sliding scale from 19%-40%

Capital Gains Tax on the sale of real estate acquired after 31 December, 2006 is at the new rate of 19%. Owners are CGT exempt after five years

Emerging hotspots

Lodz

With the opening of a high-speed rail link from Warsaw cutting commuting time to just 45 minutes, property interests are looking up in Poland’s second-tier city, with creative remodelling of downtown tenements and factory buildings drawing attention from portfolio buyers. “Buy-to-let isn’t big as yet,” explains Sam Reynolds of Property Secrets, “but it’s where the market is heading. Property prices of around €650-€850 per m² are competitive compared to Warsaw and Krakow.” Overlooking two palaces, the 19th-century Cotton Mill residence is being sympathetically converted into luxury apartments. Prices with Property Secrets start from €75,000 for a one-bed.

Zakopane

Nestling in the foothills of the Tatras Mountains, just a two-hour drive from Krakow, Poland’s official ‘winter capital’ has come a long way from its bear steak and caving days. Attracting over two million tourists a year, the region’s four downhill areas include the challenging Kasprowy Wierch, accessed by a stoic two-stage cable car. “Poles own holiday homes here, so values have remained steady,” says Nick Dare, of Dare Property. “The ski season is long, with hiking, rock climbing and fishing bringing an active rental window of around eight months a year.” Apartments sell for around €120,000, while chalets fetch around €220,000, with Koscielisko commanding a premium.

Les brillantes affaires polonaises

L’approche libérale pratiquée actuellement par la Pologne en matière de tourisme résidentiel, contribue à stimuler les investissements dans les villes de Varsovie et de Cracovie.

Selon Judi Williams de Property Frontiers, “la Pologne exerce une énorme attraction sur les purs investisseurs, avec une croissance économique dépassant les 5% et une flambée de l’immobilier qui dans la région, représente 10% par an, et plus encore dans les villes clés.”

Louis Mann de Validus ajoute, “les immeubles de caractère constituent un excellent choix, avec des appartements du tournant du siècle, qui maintiennent parfaitement leur valeur.”

A Varsovie, l’immobilier résidentiel augmente en moyenne de 15%, et dans les quartiers les plus prisés cette hausse peut atteindre 30%, tandis que la demande pour des locations d’appartements à deux chambres a créé un boom dans le secteur des penthouses de prestige.

Les meilleurs quartiers comprennent Bialoleka et Wesola, tout comme Ursynow, tandis que Saska Kepa et Upper Mokotow voient croître leur popularité suite à l’arrivée de jeunes propriétaires. A titre d’exemple, une villa de brique rouge rénovée avec goût avec un jardin privé, se vend autour des €.

A Cracovie le marché du logement à court terme, est également en ébullition, plus particulièrement dans la Vieille Ville et dans le Quartier juif.

Le gros du marché se concentre sur les appartements, la plupart du temps des résidences d’époque rénovées, avec des aménagements classiques et de hauts plafonds. Le projet Golden Gate non loin de la Vieille Ville et de Kazimierz dans la rue Cystersow propose des appartements situés dans un cadre de verdure pour €92 400.

Rakowice, un quartier arboré et Kleparz sont des lieux qui montent, à l’instar de Debniki au sud ouest. Ils offrent de bonnes perspectives pour les petites villas et les maisons construites après-guerre.

Au sud du centre ville, à Duchacka, Sunny Hill est un projet immobilier de belle facture. Les habitations à une chambre démarrent à €80 000 et peuvent aller jusqu’à €90 000 pour deux chambres, via l’agence Property Secrets.

Populair Pools vastgoed

De Poolse no-nonsense aanpak van het verblijfstoerisme in Warschau en Krakau lokt heel wat investeerders.

Volgens Judi Williams van Property Frontiers “kent Polen veel interesse van kopers die willen investeren. Goed voor een economische groei van meer dan 5% en vastgoedprijzen die per jaar met 10% stijgen, en meer zelfs in de grote steden.”

Louis Mann van Validus voegt toe: “Karaktereigendommen zijn een uitstekende keuze, net als stadsflats van rond de eeuwwisseling.”

In Warschau stijgt residentieel vastgoed met gemiddeld 15%, in trendy wijken tot 30%. Daarbij blijken ‘huurvriendelijke’ flats met twee slaapkamers tegenwoordig populairder dan prestigieuze penthouses.

Topdistricten zijn onder meer Bialoleka en Wesola, samen met Ursynow, terwijl Saska Kepa en het noorden van Mokotow steeds meer jongere kopers aantrekken. Smaakvol gerenoveerde villa’s in rode baksteen met afgeschermde tuin gaan van de hand voor €250.000 en meer.

Ook in Krakau floreert de markt voor korte verblijven, met als populaire wijken de oude stad en de Joodse wijk.

Appartementen domineren er de vastgoedmarkt, meestal opgesplitste panden met hoge plafonds en klassieke afwerking. Het Golden Gate-project dicht bij de oude stad en Kazimierz in Cystersow bieden flats met een afgesloten tuin vanaf €92.400.

Opkomende districten zijn het groene Rakowice en Kleparz, en ook Debniki in het zuidwesten, vooral voor kleine villa’s en naoorlogse stadshuizen.

Sunny Hill is een stijlvol nieuwbouwproject in Wola Duchacka, ten zuiden van het stadscentrum. Property Secrets biedt er appartementen aan vanaf €80.000 (één slaapkamer) tot €90.000 (twee slaapkamers).

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