The boom on Poland's construction market has attracted a growing number of real-estate developers from around the world. Of these, Israeli developers are especially prominent, accounting for an enormous amount of development activity in Poland, especially within the residential sector. Israeli companies account for some of the largest residential projects in Warsaw and other large Polish cities.
Welcome to Poland
"Poland is definitely a key-market for Israeli developers," said Paweł Grząbka, managing director of the real-estate consultancy firm CEE Property Group. "Unable to enjoy fast growth in their country, the Israelis choose to expand in Poland with its large market and growing demand for high-class property," he added. "Thanks to historical ties between Israel and Poland, Israeli businessmen know the market better, because they can also rely on locals for deeper investigation."
According to Grzàbka, there are currently some 20 large foreign developers and 50 to 80 medium-sized ones in the Polish market, which together have invested of around zł.5 billion in residential projects in Poland. "Of these companies I can name around 10 developers of Israeli origin and capital, some of whom are also involved in non-residential projects," Grzàbka said. This group includes such names as AFI Europe, BSR Europe, Bukowinska Development, Dor Group, Engel, International Theaters and Mill-Yon, to name a few.
Although Israeli developers are also present in the shopping-mall and warehouse market, residential projects constitute the majority of their revenues. AFI Europe, in a joint venture with Macquarie Global Property Advisors, has invested zł.1 billion in Wilanów One. Upon its completion in 2012, the high-class apartment complex will offer 2,500 flats.
"We will also build a 40,000-sqm shopping center nearby, so we can meet all the needs of the residents," said Danny Gazit, AFI Europe's business development manager.
In Kraków another Israeli developer, BSR Europe, is constructing Osiedle Europejskie, a project which is currently in its sixth stage, with over 1,400 apartments being delivered so far.
Going up
Recently Lilium, one of BSR's subsidiaries, announced plans to build a 200-meter-tall skyscraper on Al. Jerozolimskie in Warsaw, right beside the Marriot hotel. The property will compete with Orco's nearby Złota 44.
Israeli developers are confident that their extensive experience will give them an advantage when it comes to quality of service. "After the State of Israel was founded, we had to cope with a residential problem and we gained a significant amount of know-how," said Yael Rothschild, proxy for Mill-Yon, a subsidiary of Israel Land Development Company (ILDC). Apart from its residential projects ILDC, in joint venture with Polish-based companies, has delivered several office buildings and warehouses such as Millenium Logistic Park in Pruszków.
Optimistic outlook
A recent report and development forecast from PMR on the construction sector in Poland states that construction companies, both Polish and foreign, are more optimistic about the current market climate than at any other time in the past several years. This is in spite of looming problems such as shortages of labor and construction materials and soaring costs.
"As long as the the Polish property market continues to grow and developers are enjoying favorable conditions, Israeli investors will come to Poland," said Avi Friedman, economic attaché at the Israeli Embassy. He also confirmed that the economic department of the embassy continously receives inquiries from new developers regarding entering the Polish market.
