Will the Warsaw district of Praga emerge as the winner of EURO UEFA 2012?

Warsaw, 20 June 2012 – The UEFA European Football Championship 2012, a time when everybody gets to find out where the National Stadium is located, is a good opportunity to take
a closer look at the Praga district of Warsaw. Experts from CBRE, the leading global real estate consultancy, focused on Praga from the real estate point of view. According to CBRE, while the potential of Praga remains unrealized fully, there is a big chance that investments related to EURO UEFA 2012 combined with promotion of the district as the location of the National Stadium, as well as planned infrastructure development, will provide a boost to Warsaw’s right bank.

Praga today – not yet thriving with business but already attracting with its atmosphere

The two Praga districts, Praga Poludnie and Praga Polnoc, are among the least developed areas in Warsaw in terms of office property supply. Difficult access to the city center and the poor condition of many buildings have so far resulted in limited interest from developers and investors. While many historic buildings have been renovated and add beauty to the neighbourhood, it is hard to find a spot where shabby old houses do not spoil the impression made by these efforts.

The existing office supply on the right side of the Wisla river currently amounts to 171,000 sq m, compared to nearly 3.5 million sq m in Warsaw’s left bank. The first modern office scheme in the Praga district was Promenada at Ostrobramska Street, followed by Centrum Milenium, Blue Point, Warszawa Wilenska and Radwar Business Park. The rental rates in Praga are among the lowest in Warsaw. While in the city center the headline rents reach EUR 27/sq m/month, just a 5 minute drive to the east it is possible to lease modern office space for EUR 13-15/sq m/month. Praga’s retail market is perceived as more mature, with over 360,000 sq m of retail space in shopping centers such as Promenada, Warszawa Wilenska, CH Goclaw or King Cross Praga, while the supply of retail space in left-bank Warsaw totals 963 000 sq m.
“We have been observing a positive shift in the perception of Praga in the last few years. From
a neglected district suffering from a poor safety record, Praga is becoming a buzzing cultural center, with revitalized postindustrial properties setting the pace in alternative arts. These include Fabryka Trzciny, SOHO Factory, M25, Hala Wysokich Napiec or the trendy clubs on Zabkowska Street”, said Agata Czarnecka, Senior Consultant, Research and Consultancy at CBRE Poland. Other cultural investments, such as the Museum of Praga being developed on Targowa street, or Sinfonia Varsovia concert hall to be located on Grochowska street, will surely add to Praga’s appeal.

Infrastructure improvements will provide a boost to Praga

The preferences of office tenants when choosing a location depend strongly on the infrastructure, with focus on the availability of public transport. The infrastructure plans for Praga are very extensive, however, it will probably take more than a few years to complete all planned investments. The second metro line is already under construction. The central section, from Rondo Daszynskiego to Dworzec Wilenski, will be completed in mid-2014. There will be two stations on the right side of the Wisla river: Stadion and Dworzec Wilenski. The remaining part of the second line will be built at a later date. There are also plans to construct a southern section of the second metro line, which will connect the Stadion station with the Goclaw district.

In terms of road improvements, plans include the construction of the Trasa Tysiaclecia route connecting Zaba junction with Grochowska street, Trasa Swietokrzyska route as the extension of the Swietokrzyski bridge, and the Srodmiescie ringroad from Zaba junction to Wiatraczna roundabout.

„The new bridges over the Wisla built in recent years, as well as the modernization and revitalization of the areas surrounding Warszawa Stadion and Warszawa Wschodnia railway stations, have already improved daily river crossings and raised the comfort of travel for many commuters. However, it is the second metro line that will be a breakthrough, enabling easy access to the city center, and allowing a fast commute to those employed with companies that decide to locate in Praga”, said Joanna Mroczek, Director, Research and Consultancy at CBRE Poland .

Ambitious plans for Praga – hopefully they will come to fruition

Despite limited supply, there are several commercial schemes proposed in the district of Praga. The major ones include:
• SOHO Factory on Minska street – this currently consists of post-production facilities and is dedicated to cultural and community activities. Plans call for the development of residential and retail space, with the first phase currently under construction.
• Port Praski on Wybrzeze Szczecinskie – one of the largest and most varied developments proposed in Warsaw. Planned functions include residential, office, retail, recreational and cultural, with the total area amounting to nearly 500,000 sq m. The start of construction of the first phase is planned for 2012.
• Conversion of the former PZO factory on Grochowska street and the former PAP printing house on Minska street into office or residential space.
• Centrum Praskie Koneser located along Zabkowska street in a former spirits factory – over 60,000 sq m designed for retail, leisure and services, as well as office and residential purposes.

The most important investment linked to EURO UEFA 2012, the construction of the National Stadium developed on the site of the former Jarmark Europa market, has definitely changed the image of the district, improved safety and will allow for massive cultural events to be organized, which will attract Warsaw inhabitants. One of the concepts of developing the surroundings of the National Stadium includes the construction of a sports hall, an Olympic-size swimming pool,
a congress center and an office complex. The development of commercial schemes in the Praga district will strongly depend on further delivery of public improvements, infrastructure in particular. Therefore, it should be hoped that the enthusiasm of city authorities for investing in Praga will not wane when the football championships are over.