Poland: Conversions and Changes in Purpose

In a difficult market environment, real estate owners, including investment funds, encounter difficulties in achieving the expected return on their assets. The investment environment requires more and more creativity in the approach to business, and at a later stage, creativity in ensuring the ultimate sale of a building.

Currently, in contacts with investors, we are witnessing a strong trend of plans to convert office buildings into hotels. One reason is that in the hotel sector it is possible to secure a long lease to a hotel operator, denominated in euro. This means both revenue stability and reduced exchange rate risk for the investor.

There is also a trend of the purchase of older office buildings by residential developers, but mainly with the plan to demolish them and implement a new function, occasionally with the aim of converting them into a PRS scheme.