Poland’s first YIT Homes to be built in Warsaw
YIT is planning to build Poland’s first YIT Homes in Warsaw starting in 2016. The principles and values of sustainable development will be a high priority in the new homes.
YIT established a new subsidiary in Poland in summer 2015 with a focus on housing development. The aim is to have the new subsidiary fully operational within one year. The operations in Poland will further solidify YIT’s position as a developer in Central Eastern Europe.
Tomasz Konarski has been recruited as the CEO of the newly established subsidiary and tasked with creating the local organisation, finding the first plots of land, and launching the development of the first apartments. The plan is to move ahead quickly and begin construction as soon as a suitable plot is identified. The actual construction work will be outsourced to local construction firms. YIT’s local team is likely to grow by 3–5 new recruits during the first year of operations.
“Our goal is to have the first apartments on sale by summer 2016,” says Tom Sandvik, Senior Vice President, Central Eastern Europe Division.
Sandvik explains that, in order for the business to be sustainable and profitable, YIT must reach a level of approximately 200–300 apartments sold per year in each country it is established in. In Poland YIT operates as a project developer without having any construction capacity of its own.
Reasonably priced homes
YIT’s strategy in Poland is clear: focus on housing production and the Warsaw market. The greater Warsaw region has a population of approximately three million. The annual volume of new housing production in Poland is approximately 150,000 homes. Nearly 45 per cent of the new homes are apartments.
“We are looking at the entire Warsaw area, but we are particularly interested in good plots of land in the city centre. YIT will develop homes for middle class customers and high-income white-collar families. In other words, we will focus on comfort and business class projects, just like in our other operating countries,” Sandvik says.
Apartments in Poland are typically sold with concrete interior surfaces and no finishing. Interior elements such as tiles, parquet floors and fixtures are not included, which means that buyers are responsible for finishing their apartments. However, YIT will offer the Warsaw market the opportunity to buy a fully finished apartment. It is one way for YIT to differentiate itself and provide a high standard of service.
“We compete on the rationality, quality and functionality of our apartments. We want to introduce the Finnish lifestyle to the Polish market,” says Tomasz Konarski.
Konarski also underlines the significance of the principles and values of sustainable development in building new apartments. Particular focus will be placed on energy-efficiency and environmental issues.
Stable economy supports growth
Poland is the largest eastern economy in the European Union. It came out of the 2009 financial crisis relatively unscathed compared to its neighbours. There are several reasons for this: Poland has the strong domestic market of a large country, its own currency and a strong focus on investment in infrastructure.
Poland joined the European Union in 2004, but it has not given up its own currency, the złoty. Joining the European Union has led to concrete improvements in Poland’s infrastructure, particularly the road and rail network.
The Polish parliamentary election held in December 2015 was won by the eurosceptic Law and Justice party. The election result’s impact on the economy remains to be seen, but stimulating the economy was a key campaign promise in the run-up to the election.
Hints of residential property investment
Apartments in Poland are typically owner-occupied. The housing stock was rapidly privatised in 1990 after the end of the communist regime allowed people to buy their homes at nominal prices.
The state provides support to young people and young families that are buying an apartment. The impact of this policy is felt in the market in the form of stronger demand.
Sandvik considers Poland to be an interesting and promising market. The country has a population of nearly 40 million people, and the people of Poland have a desire to become wealthy. They still have a lot to do to reach Western European living standards, which makes them enterprising and creates dynamism in what they do.
“There are already some rental apartments in Poland, and residential property investment has begun to interest the people of Poland as their wealth increases,” Sandvik explains.
One of the risks associated with the Polish market is the emigration of highly educated young people. There are more than a million Polish people living in the UK alone. The Polish property market also has a relatively large amount of unsold finished apartments.
“In addition to Warsaw, there are 3–4 other interesting cities in Poland. However, expanding to other cities is not in our current plans. This may change once we have established our position in Warsaw,” Sandvik and Konarski conclude.
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