A wave of consolidation sweeps Poland's real estate market
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Loading... - Betty Simpson
- 17 Mar 2022
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The real estate development market in Poland is still largely fragmented, with most property developers limiting their activity to just one big city and the surrounding area. Many such companies are success stories of local entrepreneurs who struck gold with their real estate businesses in the 1990s and are now ready to cash in on decades of hard work.
These local developers are now increasingly attractive for larger entities – major domestic players or international capital looking to enter a new market. For foreign investors in particular, acquiring an established local brand means they can jump right into the mix rather than build their market share from scratch.
This tendency towards consolidation has been gathering pace in recent times and according to some experts, it’s likely to continue for the foreseeable future.
“The Polish real estate sector is clearly consolidating, the trend being that the bigger your company gets, the more business potential it has,” says JarosÅ‚aw JÄ™drzyÅ„ski, real estate specialist at RynekPierwotny.pl, Poland’s largest property portal.
“It’s becoming harder and harder to grow in the Polish market in any other way than through takeovers of existing development companies,” JÄ™drzyÅ„ski tells Emerging Europe.
A slew of acquisitions
December 2021 saw one of the biggest acquisitions in Poland’s housing market in recent memory when Goldman Sachs sold Robyg, one of the country’s largest real estate developers.
Soon to be finalised, the deal will net Goldman Sachs 2.5 billion złoty (around 521 million euros) and, as Jędrzyński points out, a profit of more than 100 per cent.
Robyg’s new owner is TAG Immobilien, a Hamburg-based real estate giant which has been actively seeking to expand its market portfolio in Poland. The company previously purchased Vantage Development, a property developer from WrocÅ‚aw, and is now one of the biggest landholders in the country.
A few other Polish real estate companies have also changed ownership of late, including Budimex Nieruchomości, a prolific Warsaw developer which has built over 19,000 apartments in Poland since its inception in 1999.
Renamed to Spravia after its acquisition in May 2021, the company was bought jointly by Cornerstone Investment Management and Crestyl Group for 1.51 billion złoty (around 313 million euros) in what was one of the most expensive takeovers in the region since the Covid-19 pandemic had started.
And just last week, Poland’s largest housing developer Dom Development purchased Buma Group, a real estate company from Kraków, for a total amount of 209.5 million zÅ‚oty (around 44 million euros).
“The acquisition consolidates our presence in Kraków,” said JarosÅ‚aw Szanajca, chairman of Dom Development. “It’s definitely a great starting point for us to build a strong market position in the city.” Read More…
