Going in and out of crises, together

The comprehensive agenda of the conference commenced with an opening gala dinner and an inspirational talk by our fantastic special guest speaker, the acclaimed behavioural expert and author Thimon De Jong. He took attendees on a thought-provoking and much-needed journey through rough waters of pressures felt while living in times of polycrisis, complexity and uncertainty, and their impacts on social behaviours and mental health. He explained how people embrace changes, and the importance of knowing what our “automatic elevators” are in our personal, team and organisational lives. “Add a human or emotional element to every change you want to implement,” he reminded everyone present before the evening continued with a great dinner, network reconnecting, and socialising.

Other market opportunities might derive from the current macroeconomic situation. “This surely is a horror century, given the financial crisis, pandemic, or an open war in Europe, but somehow we are surviving and going through it,” said prof. Witold Orłowski, Chief Economic Advisor at PwC Poland. “Poland’s economic growth will come back in H2, although I expect it to be moderate. The risk of recession is temporary, the risk of stagflation is there to stay,” he added. Despite the ongoing war in Ukraine, Poland enjoys record high FDI levels. Therefore, a lot will depend on the way Poland responds to the current economic landscape and seizes opportunities. “We will experience problems with the financial sector; however, this will not produce any major financial instability,” he concluded.

While European and Polish firms continue to grow their ESG capabilities and processes, integrating social and environmental factors into their business models for good, they also enter the phase of practicality grounded realization on what the ongoing sustainable transformation will really require from them and their stakeholders. “One of the key points we look at when making an ESG-related credit decision is the continued ESG suitability of an asset for its buyer or owner in the long-term,” said Łukasz Białecki, Head of Real Estate Financing at Bank Pekao, in the subsequent panel discussion. “Looking ahead, in the future we will need to place more focus on redeveloping and retrofitting as opposed to constructing new buildings,” he pointed out.

Investors admit that despite their willingness to make their business greener, in many respects their hands are tied. “Since we rely on a carbon-fuelled energy grid in Poland, almost every building is somewhat stranded. There need to be decarbonization public policies in place first. We are happy to see a decision on developing nuclear power capacity in the country,” explained Anna Duchnowska, Managing Director at Investment Management Europe, Invesco EMEA. “The best thing you can do on your own as an investor is to work on concepts helping to optimize energy intensity,” she added.

Affordable housing scale-up

The above “info-burst” opened the floor for another crucial topic, highlighting the ‘Rising challenge of creating affordable living’ presented by Katarzyna Przybylska, Head of Advocacy at Habitat for Humanity Poland. She went through best practices and success stories that could serve as a benchmark or directly cater to the needs of the slowly incubating affordable housing sector in Poland. She also familiarized the audience with the state-supported but broadly unknown housing policy concept Social Rental Agency and explained the importance of similar initiatives for Poland’s sustainable growth. In the discussion that followed, the panellists considered main obstacles and diverse ways in which private, public, and NGO sectors could act together to speed up and scale up the delivery of social housing projects.

How long can equity wait to be deployed?

While 2023 is likely to continue with high inflation and interest rates, Polish real estate pricing and quality of new assets will continue to attract institutional investors who are historically familiar with real estate products in CEE and investment returns in these markets, in particular Poland and Czechia. “The wall of capital we keep hearing about is still there, but a lot of it is waiting,” said Kevin Turpin, Regional Director of Capital Markets CEE at Colliers. According to the company’s most recent report, domestic investment capital continues to be almost non-existent in the Polish real estate market, standing at just 2%, which should be addressed by the local regulators. “When international capital leaves the Polish market or goes back to its home markets, this leaves a big gap. (…) Moreover, the margins that the industry has enjoyed up till a year ago are no longer available. We are probably not going to see any significant activity returning to the market in 2023,” Kevin Turpin explained.

Radically rethinking the future of urban mobility

The inspiring and insightful sessions were rounded up by an incredible closing presentation by Andrei Martin, Partner at PLP Architecture Studio, who enchanted our audience members with IUMO. The ground-breaking conceptual project of urban vertical and horizontal transportation systems builds on the idea of introducing efficiently designed grids for under and overground autonomous vehicles. The impressive, sustainable, on-demand and point-to-point solution could help to free up urban space, reduce travel time by as much as 75%, and open opportunities for new architectural concepts. “Our mission is to leverage technology and human-centric design, so that through our built environment we can begin to really tackle and solve some of the biggest challenges of our time,” said Andrei Martin. We truly hope this credo can be jointly shared within the entire industry in the years to come.