In an exclusive interview with LDaily, Mażena Byvalets, the owner of the consulting company AREAS Consulting, revealed the dynamics of the development of Poland’s logistics and industrial sectors. She not only shared her perspective on challenges related to changing market conditions and competition but also illuminated potential prospects, such as the development of environmentally sustainable and technologically advanced properties. In the interview, she discussed the impact of investment diversification on the Polish real estate market and how this market can identify unique opportunities and successfully adapt, despite the challenges of the times.
LDaily: Could you please tell us a bit about yourself and your experience?
M. Bywalec: I am the founder and owner of AREAS Consulting, a dynamically growing consulting firm in the commercial real estate sector.
My professional career spans over three decades of experience in the commercial real estate market in Poland. I specialized in developing retail chains in Poland, acquiring strategic properties, and managing them along with optimizing costs. My professional experience includes key managerial roles in international retail chains such as Jeronimo Martins and Auchan, where I played a significant role in creating and managing expansion and real estate management departments.
For over 10 years at Auchan, as a Regional Director, I supervised the development of supermarket chains in southern Poland and managed assets and property portfolios. At Jeronimo Martins, I established from scratch the department of expansion and real estate management, which contributed to a significant increase in the company’s profits.
Leading AREAS Consulting, I have enriched my higher economic education with an Executive MBA diploma, and postgraduate studies in property valuation and real estate management. I am currently in the process of obtaining state qualifications as a property appraiser, but thanks to the support of the appraisers’ community, I am already a member of the Masovian Association of Property Appraisers in Warsaw. I have also completed one module of the international course from the Chicago Institute and PFRN CI 101 CCIM. All this was possible because I run my own business as AREAS Consulting. Such a broad range of knowledge allows me to look at the commercial real estate market much more broadly and understand it better.
LDaily: Could you please provide more details about your company? How did the idea for its creation come about? What does the company do? What are its competitive advantages over other companies?
M. Bywalec: AREAS Consulting was born out of my passion for innovation, cost optimization, and the desire to provide effective, individually tailored solutions in line with the upcoming trends in the commercial real estate and management sector. My experience in the expansion and management of retail chains’ real estate at Jerónimo Martins and Auchan was pivotal for my development and success in the commercial real estate industry.
Working in these companies allowed me to understand how crucial in-depth market analysis and identification of strategic locations are, necessary for optimizing retail networks. Managing expansion, I gained invaluable negotiation skills, essential in leasing and purchasing real estate agreements. My role in these companies also required a deep understanding of the financial and operational aspects of real estate management, which directly translates into making effective investment and management decisions in the real estate sector.
Furthermore, working for retail market leaders enabled me to develop a practical approach to portfolio management and understand the importance of adapting real estate strategies to the changing needs of the market and consumers. This holistic view of the commercial real estate market is the foundation of my approach. I combine commercial, operational, and customer-oriented aspects, acting as an advisor and investor in this industry.
We specialize in strategic consulting, commercial real estate management, and in identifying and realizing investment opportunities. Our clients are companies owning dispersed real estate assets in Poland or in specific regions, striving for network development or cost optimization of their existing network. We provide comprehensive services, including analysis and renegotiation of lease terms, as well as optimization of operational costs, which constitutes our competitive advantage. Our approach combines deep market knowledge with an individual approach to each project, allowing for effective management of our clients’ real estate assets.
LDaily: How do you assess the real estate market in Poland? What challenges did you face in the real estate industry in 2023, and how did you overcome them? How do you envision the real estate market in 2024?
M. Bywalec: Drawing upon the latest data from the Cushman & Wakefield report for 2023, the Polish real estate market in 2023 was characterized by intense developmental activity and dynamic growth. The addition of approximately 450,000 sqm of new retail space and a record number of 29 new retail brand debuts in Poland, the highest since 2017, demonstrates the market’s attractiveness to international investors. The record supply of modern retail space in the fourth quarter of 2023, reaching 217,000 sqm GLA, translates into positive prospects for 2024.
Our firm actively responded to these changing market conditions. We focused not only on the retail sector but also on collaboration with investors, for example from Ukraine, who are also looking for opportunities in the Polish real estate market. By participating through market analyses and searching for locations and tenants, we strive to tailor our offerings to the needs and expectations of investors unfamiliar with the Polish market. We also faced challenges such as renegotiating agreements in retail facilities and optimizing costs, which was crucial in the context of rising average rents, especially in shopping malls. Increasing vacancies in certain retail and office locations posed an additional challenge.
In 2023, we also noticed increased interest from local investors in smaller retail spaces, which influenced our real estate management strategies and approach to clients seeking cost optimization while maintaining flexibility.
In the context of forecasts for 2024, considering the professionalization and specialization of the industry, we anticipate further market development. Our firm intends to actively adapt to the changing needs of consumers and introduce innovations, with a particular emphasis on adapting to changing consumer needs and introducing innovations in service offerings. In collaborating with various investors, our focus is on tailoring strategies to the individual needs of each client, taking into account changing market trends and requirements. We aim to ensure that our actions contribute to increasing the efficiency and profitability of our clients’ investments in the commercial real estate sector.
LDaily: The global economy is currently at a turning point. What impact might this have on the Polish real estate market? What opportunities and challenges do you expect for companies operating in the Polish market, especially in your industry, in the near future?
M. Bywalec: The current turning point in the global economy, characterized by uncertainty and volatility, could significantly impact the Polish real estate market. Against the backdrop of forecasts by analysts from the National Bank of Poland, which predict an average CPI inflation rate for Poland in 2024 of between 4.4% and 6.5%, and an anticipated GDP growth of 2.2% to 3.7%, increased investor caution can be expected. Such conditions may influence price dynamics and the availability of financing.
However, Poland remains an attractive market due to its stable economic foundations and growing demand in key sectors. The Colliers report for the third quarter of 2023 indicates the significant completion of many large office projects in Poland’s regional cities, delivering a considerable amount of modern office space. This reflects a sustained investor interest in the Class A office segment. Meanwhile, the BNP Paribas Real Estate Poland report emphasizes strong demand and dynamic development in the logistics and industrial sector in Poland, contributing to the activation of local labor markets and the increase in investments in new projects.
The challenges for the market will be adapting to changing market conditions and maintaining profitability in the face of increased competition and changing consumer preferences, which may be shaped by global factors. However, there are also opportunities, such as further developing properties in areas with growth potential, including environmentally sustainable and technologically advanced properties. The rise in ecological awareness and focus on sustainable development could lead to increased demand for “green” and energy-efficient buildings, opening the door to innovations and development in construction technology.
In the context of increasing global uncertainty, the Polish real estate market could also benefit from investment diversification, enhancing interest in the premium real estate segment and stable assets, such as commercial properties in good locations.
In summary, the Polish real estate market faces a series of challenges, but also offers unique opportunities for adaptation and innovation. The key to success will be flexibility, the ability to respond quickly to market changes, and the capacity to identify and leverage new trends and opportunities.
LDaily: What are the current expectations of buyers and sellers?
M. Bywalec: Buyers and sellers in the real estate market currently expect greater transparency and security in transactions. According to Redfin forecasts, 2024 may bring relief for buyers, with a decrease in home prices and an increase in new listings. Buyers are seeking properties that offer added value in the form of modern amenities and sustainable development. On the other hand, as indicated by the CBRE report, investment activity in commercial real estate is expected to rise in the second half of 2024, which may mean that sellers will aim to maximize their return on investment through effective management and positioning of their properties.
It is also important to pay attention to rapidly changing preferences resulting from the evolution of lifestyle and work, which affects the residential and commercial markets. For example, CBRE points out that the normalization of hybrid work arrangements will continue to limit the growth in demand for office space.
Such an evolution in preferences may prompt sellers to convert underutilized office buildings to other purposes, such as residential or service facilities.
In summary, the real estate market in 2024 will be shaped by the expectations of both buyers and sellers, which will be a response to changing economic and social conditions. Both buyers and sellers will need to adjust their strategies to meet these challenges and take advantage of available opportunities.
LDaily: Do you consider the digitization of the real estate market to be an important issue?
M. Bywalec: The digitalization of the real estate market is extremely important as it introduces new possibilities in terms of data analysis, transaction efficiency, and property management. The development of technologies such as virtual reality (VR), online transaction platforms, and data-driven property management allows for more effective communication between buyers, sellers, and property managers. Digitalization also promotes increased market transparency, which is crucial for building trust and attracting investments.
For instance, virtual reality enables potential buyers to thoroughly explore a property without the need for a physical visit, which is particularly important amid travel restrictions and a growing preference for remote solutions. Online transaction platforms, on the other hand, facilitate the entire buying and selling process in a more automated and efficient manner, reducing the time and costs involved in transactions.
Data-driven property management allows for a better understanding of the market, trend analysis, and optimization of property portfolio management. These technologies enable the collection and analysis of large volumes of data in real-time, leading to better market trend prediction, more efficient property management, and optimization of profits.
Additionally, digitalization contributes to the increased accessibility of the real estate market, allowing a wider group of investors and buyers to participate in the market, regardless of their geographical location. This makes the market more global and competitive.
In summary, the digitalization of the real estate market is a key issue that is revolutionizing the way we buy, sell, and manage properties. It brings numerous benefits such as increased efficiency, improved data analysis, and greater accessibility, which are essential for adapting to the rapidly changing world and market expectations.
LDaily: How would you characterize the current economic situation in Poland and its investment attractiveness?
M. Bywalec: The current economic situation in Poland is characterized by stable economic growth, supported by solid macroeconomic foundations and proactive government policies. Poland continues to position itself as an attractive destination for foreign investments, which is a result of its strategic location in Europe, developed infrastructure, and skilled workforce.
As I mentioned in my response to question number 3, the real estate market in Poland shows positive trends with intense development activity and dynamic growth, reflecting the overall economic attractiveness of the country. Investments in the real estate sector, both commercial and residential, are promising due to rising demand and stable returns on investment. This trend aligns with the general market expectations, as I highlighted in responses to questions number 4 and 5, where I pointed out the growing demand in key sectors and the impact of digitalization on the efficiency of the real estate market.
It’s also worth noting that as a member of the European Union, Poland benefits from the single market and EU structural funds, which favors investments in infrastructure and economic development. The Polish economy also demonstrates an ability to adapt and innovate, which is evident in the growing role of the service sector, including finance, IT, and research and development.
In conclusion, Poland offers a stable and attractive investment environment, supported by solid economic foundations, strategic location, and continuous development. The real estate sector, both commercial and residential, is particularly promising for investors, due to positive forecasts for demand growth and attractive investment returns.
LDaily: In your opinion, what initiatives or reforms could improve the business environment and enhance the competitiveness of Polish companies on the global stage?
M. Bywalec: Improving the business environment in Poland would require further deregulation and simplification of administrative processes to facilitate the establishment and operation of businesses. As I previously mentioned, digitalization and information technologies play a key role in enhancing the efficiency of the real estate market, and continued investments in these areas would be crucial for enabling Polish companies to better compete on the global market.
Moreover, increasing investments in research and development, as well as supporting innovation, is of fundamental importance. The development of unique competencies and products, especially in technologically advanced sectors, would contribute to enhancing the competitiveness of Polish enterprises globally. In the context of the real estate market, these investments could include the development of sustainable building technologies and smart buildings, which would, in turn, increase Poland’s investment attractiveness.
Additionally, creating a conducive climate for startups and innovative businesses, through tax incentives, grants for research and development activities, and easier access to financing, is vital. Poland could also focus on further developing sectors such as renewable energy, IT, and biotechnology, which would contribute to diversifying the economy and enhancing its resilience to global challenges.
In summary, improving the business environment in Poland requires a comprehensive approach that includes deregulation, investments in digitalization, research and development, and support for innovation. Such measures would not only facilitate business operations but also contribute to enhancing the competitiveness of Polish companies on the international stage, including in the commercial real estate sector.
LDaily: What valuable lessons do you think Ukraine could learn from Poland’s experience in the real estate sector to improve its global position?
M. Bywalec: In the current situation, Ukraine is facing immense challenges due to the ongoing conflict and its consequences. In the short term, the priority is ensuring safety and humanitarian support for the citizens. In the long term, lessons learned from Poland’s experiences in the real estate sector could prove helpful for the country’s reconstruction.
During the post-conflict rebuilding process, issues such as stabilizing the legal and regulatory environment, investing in urban and communication infrastructure, and focusing on innovation and sustainable development will be crucial. Supporting the development of the residential and commercial real estate market can contribute to the economic recovery and improve living standards.
International support and cooperation with other countries and international organizations will be important in the reconstruction and stabilization process. This cooperation might include financial assistance, technology transfer, and the sharing of experiences in crisis management and rebuilding.
In conclusion, Ukraine faces extraordinarily difficult challenges, but adopting strategies focused on stabilization, reconstruction, and long-term development can help gradually rebuild the country and its economy, including the real estate sector.
LDaily: In your view, what innovations or changes in the Ukrainian market might increase the interest of Polish investors in the future towards the Ukrainian market?
M. Bywalec: Ukraine, with its significant potential in the commercial real estate sector, as well as its rich natural and agricultural resources, can attract Polish investors through a series of strategic innovations and changes. Firstly, further improvement of the legal and regulatory environment is crucial, which would increase transparency and investment security. The introduction of clear and predictable legal frameworks regarding property ownership, leasing, and foreign investments could be particularly enticing.
Secondly, the development of logistical and technological infrastructure in Ukraine could significantly improve the market’s attractiveness. Investments in modern logistics centers, industrial parks, and class A office buildings could attract companies interested in expanding into Eastern Europe, especially considering Ukraine’s large population and strategic location.
Another important factor is the increase in Ukraine’s macroeconomic stability. Currency stability, inflation control, and proactive economic policies can encourage long-term investments, particularly in the context of its large domestic market and agricultural potential.
Additionally, the development of the information technology sector and innovations, as well as green energy and sustainable construction, could create new opportunities for Polish investors interested in future technologies and sustainable development. Such an innovation strategy could leverage Ukraine’s rich natural resources and human capital.
Finally, intergovernmental and interregional cooperation aimed at supporting investments and trade exchanges could be key in creating a favorable climate for Polish investments in Ukraine. Initiatives such as joint investment projects, trade agreements, and knowledge exchange programs can open new channels of cooperation and mutual benefits, utilizing Ukraine’s potential as an important player in the region.
In summary, Ukraine, with its demographic potential and natural wealth, combined with strategic innovations and reforms, could significantly increase the interest of Polish investors, opening new prospects for economic cooperation on an international level.
