Will there be more apartments thanks to the transformation act?

by   CIJ News iDesk III
2022-08-30   11:31

What are the pros and cons of transforming older office buildings and shopping malls into residential buildings? Will developers be involved in such projects? Will the act on changing the use of commercial buildings into residential buildings bring about solutions that will meet with market interest? The survey was developed by the real estate website dompress.pl

Andrzej Oślizło, President of the Management Board of Develia S.A.:
We evaluate the idea of ​​using the existing facilities and transforming them into residential buildings. This solution is part of the general trend of environmental protection by, for example, reducing the demand for cement, the production of which is responsible for 5 percent. global carbon dioxide emissions. However, it is worth bearing in mind that the change, which on the one hand will be beneficial in terms of ecology, may take place at the expense of the convenience of future residents. Commercial and office buildings were designed to perform different functions and not all of them can be easily adapted to housing needs.

Conversion of buildings in today's market realities is still a small segment of the market in Poland. Its potential, however, can be estimated on the basis of observations of Western European markets. The declining stock of greenfield land leads to a situation in which the change in the functions of some objects finds rational economic premises. Our current land bank does not include such investments, but we are not closing ourselves to market opportunities.

In practice, we are closer to changing the function of the entire area, for example from production. We implemented such a project in Wrocław, where the Nowe Miasto Młyn Różanka estate was built on the site of the former mill buildings.

Joanna Janowicz, managing director at Constructa Plus:
I believe that the possibility of changing the way the buildings are used, which the draft law relates to, will be of interest to development companies. Land banks have shrunk significantly in recent years, so any solution on the side of increasing supply will be good for the market. Unfortunately, this solution comes too late. If similar steps had been taken two years ago, they would have certainly been much more effective. I imagine that perhaps it would even significantly stop the spiral of rising real estate prices.

You must also be aware that development companies and investors in general are now much more cautious than those two years ago. With high uncertainty in the environment, fewer investors will decide to purchase such facilities, having a vision of a difficult adaptation process and the risk of estimating dynamically changing production costs.

Zuzanna Dobra, Commercial Director at Eco Classic:
It is an interesting solution, but with many limitations. One of them is the location, often next to busy thoroughfares, in an environment that is not friendly to the housing needs. In addition, office or commercial buildings have a completely different purpose, and thus their adaptation to housing needs will involve a large interference in the installations and structure of the building. The costs of these changes may turn out to be too high for the entire investment to pay off. Our company does not take such projects into account yet, but we will certainly observe this trend.

Sebastian Barandziak, President of the Management Board of Dekpol Deweloper:
Each solution that will be the result of a thorough examination of the buyers' needs will meet with market interest. It seems that such projects may be successful among buyers if their typical expectations are taken into account, such as attractive location, good access to infrastructure, functional layouts of premises, areas for various groups of recipients, additional space in the form of balconies, terraces, gardens, good finishing standard, adaptation of the facilities to the current arrangement trends, advantages such as a playground, neighborhood meeting places, recreation zones, etc. Developers may try to enter such projects due to the decreasing supply of attractive land for development. We are open to various projects you and we do not exclude the interest in this topic.

The advantages of this type of investment include the possibility of investing in an attractive location, using the advantages of existing facilities, or basing the marketing and sales campaign on the current reputation of the place.

The disadvantages include the need to adapt older facilities to the new function, taking into account the current regulations, the cost of reconstruction, a complex procedure, or the lack of clear information from the market about the estimated demand for this type of solution.

Janusz Miller, Sales and Marketing Director of Home Invest:
Taking into account the changing market conditions, the deficit of land, and hence the decreasing supply of new projects, this type of change of the service function to residential buildings will certainly meet with interest on the market and is an opportunity to improve the current situation. Housing needs remain unmet. Therefore, both we and other developers will be interested in such projects.

Małgorzata Ostrowska, director of the Marketing and Sales Division at J.W. Construction Holding S.A.:
Such solutions may appeal to investors due to the insufficient supply of land and the long duration of planning procedures. Transformation into residential buildings that used to be office buildings for many years has been carried out in Western countries. However, not every office building can be easily changed this way. In some cases, the cost of adapting a non-residential space to a residential function may be unprofitable.

Marcin Michalec, CEO of Okam:
In large cities, the resources of attractive, well-located investment plots are gradually shrinking, and the cities themselves and their outskirts are naturally expanding. Converting older shopping centers or office buildings into residential buildings can therefore be an alternative to building on the outskirts of an agglomeration or in suburban areas. Probably this option, if the regulations governing it enter into force, will be taken into account by some developers. We have not yet considered such a direction, but of course we are not ruling out any possibility. At this point, we specialize in in the revitalization of post-industrial areas and buildings, which are located in Warsaw and Łódź. The capital's projects are BOHEMA - Strefa Praga, CITYFLOW in Wola and 62 hectares in Żerań, and in Łódź - PROGRESS and Łódź.Work. Having many years of experience in this area, we will certainly develop this area further. This allows us to implement investments often located in the central locations of large cities and create unique spaces, combining historical elements with a modern character.

Boaz Haim, CEO of Ronson Development:
Due to the growing popularity of remote work and the strengthening of e-commerce during the pandemic, office and commercial buildings are not used on the current scale. The conflict in Ukraine and the influx of refugees only increased the demand for housing. The housing gap in Poland is currently 3 million, and there is a shortage of flats.

Adaptation of the existing, currently unused buildings for housing purposes, especially in the context of the refugee crisis, could temporarily solve the problem of the lack of housing on the market. As a development company, we are open to all legal solutions that may speed up the planning process and enable the construction of new apartments, also thanks to the conversion of office and commercial buildings into apartments. We will definitely be looking at these regulations.

Mariola Żak, sales and marketing director at Aurec Home:
The pandemic has already caused a sharp decline in interest in offices and commercial premises. Many office and commercial buildings suddenly emptied with a number of negative consequences, unused space is simply wasted. This, in turn, generates huge losses for owners of commercial buildings who often go bankrupt. On the other hand, the conflict in Ukraine and the related influx of refugees caused a dramatic increase in the demand for housing. Therefore, it is a good idea to use vacant buildings for residential purposes. The new proposal for legal solutions will allow without major restrictions to convert non-residential buildings into residential ones, and, consequently, increase the housing resources, which are now worth their weight in gold due to the influx of refugees.

We forecast that some developers will take advantage of this solution, the more so as the demand for flats that has been sustained for many years is As a rule, finding an attractive plot of land for housing investment is currently very limited, especially in large cities and convenient locations. Despite the fact that for a developer, the decision to build an estate in such areas means formal difficulties, for example in connection with the construction of the necessary infrastructure, companies are willing to invest in such buildings. We invested in post-industrial areas in Warsaw a few years ago. The avant-garde Fabrica Ursus estate is currently being built there.

Source: dompress.pl
Photo: Bouygues Immobilier Polska_Sienkiewicza Residence