A total of about 1.1 million sq m of existing areas, including commercial, office and others, have been changed to a housing function (including alternative projects) – according to the report “Thorough look at the real estate market” of the consulting company JLL.
According to JLL experts, in the face of increasingly lower availability of plots where you can quickly implement a housing investment, developers are increasingly more willing to reach for built -up areas where there are objects with a different function that can be rebuilt or demolished and replaced with new ones.
It has been added that a total of about 1.1 million sq m of existing areas, including commercial, office and others, have been changed to a housing function (including alternative projects). The largest of the “donors” of areas for housing were office buildings (a total of 733,000 sq m) and commercial and service facilities (over 345,000 sq m).
“It is worth emphasizing that over 485,000 sq m of office buildings, shopping malls, hypermarkets and cinemas have already been or soon it will be demolished to prepare real estate for the development of housing. sq. And these are also areas after demolishing the existing buildings, “it was indicated in the report.
As an example of such an investment, experts indicate a transaction in Wroclaw, where Develia sold Vastint the large -scale shopping mall Arkady Wrocław. The demolition is already underway – the new owner plans to implement a Mixed -USE project with a leading housing component on the recovered plot.
“A very interesting phenomenon that we took in our study are the takeover of cinemas in Warsaw and Poznań, where large housing complexes for up to 300-350 apartments will be built. In this way, in the same ground much more PUM may be created, in some cases even two or three times. Huge potential for developers looking for expansion opportunities for their activities, “said Tomasz Lewandowski, director of the land and medium format department, JLL, quoted in the report.
According to JLL, the lands that were built with offices or provided for new office buildings have been built, developers will implement or have already completed around 604,000 in the last five years. sq m of pumu. apartments, PRS premises or hotels.
“Changing the function is a natural path that developers should follow. These are often difficult investments in implementation in many aspects, including technical, formal-legal or planning. They require more temporary involvement and employing a number of advisers. However, they give broad possibilities and allow new life to unique locations. They are often the only chance to maximize the potential of a given soil. This one has been observed for many years in Western Europe, and due to the aging of office resources will be rooted more and more on the Vistula, “said Joanna Pieczyńska, director, director in the Department of Medium Format, JLL, cited in the land and medium format investment department.
As reported, only 240,000 disappeared from the map of Warsaw in the last 3 years. sq m of office space built after 1990. The demolitions were particularly visible in two regions of the capital – in the center and in Mokotów, in particular in Służewiec Przemysłowy.
“Less accessibility and high price of land for residential purpose hinders developers to build apartments for sale or rent for individual clients. Hence the approach in which PRS projects are created on service land. As many as 80 percent of currently implemented units are created on plots of such purpose” – added.
According to JLL experts, PRS projects, including the institutional lease sector, are usually greater on commercial lands than those in the areas under “Mieszkaniówka”. At the same time, the transaction prices of these lands were average lower than housing, in the range between about 25 percent. and 35 percent, depending on the location. At the most attractive points, however, this difference can reach up to 50 percent.
“In the coming years, new projects from the PRS segment will be leading in the centers of large cities as well as in post -industrial and degraded areas, which will require expenditure on demolition or adaptation of existing buildings. In addition, some office buildings will be converted into institutional rent – especially in those cities, where in the last 2-3 years there has been a high emptiness ratio” – indicates the authors of the study.
As indicated, the market of private student houses (PBSA) is also struggling with the problem of low land availability for new investments.
“Private student houses should, if possible, be located near academic centers or be well connected with them, which is why optimal locations for them are city centers or” internal “districts. Because in such areas most plots – generally very expensive – are absorbed by housing developers, also entities investing in PBSA projects are increasingly buying and converting to dormitories objects with a different function, for example, old office buildings, “experts said.
The study analyzed all changes and flows between individual sectors on the real estate market. Investments were taken into account, which in the last 5 years have changed their function from originally intended to one that suits the current needs of the market much more. (PAP Biznes)
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