The real estate investment adviser property company Revetas Capital raised eyebrows by announcing its intention to convert a portfolio of office land plots in Warsaw, Krakow and Katowice into residential. As employers struggle to convince employees to return to the office, such moves by investors only serve to increase concern over the sector’s long-term prospects. The first apartment building, B4B Meadows, is the ninth building in the huge Bonarka 4 Business project designed by Trigranit (Revetas acquired the developer in 2018).
Revetas founder Eric Assimakopoulos says that in addition to the shopping mall, Trigranit originally envisioned one-third of the buildings in Bonarka 4 Business as residential. But strong demand by multinationals for offices in Poland’s regional cities convinced the developer to change its plans. “We like optionality in all of our investments,” Assimakopoulos tells ThePrime. “So when we acquired the portfolio, we were pleased to know we had the zoning and optionality to do resi or office. I’ve been in this game for 30 years making this my fifth cycle, so I know that optionality is key. You believe in something, but we invest over a period of years and things change. When Covid happened it made it quite simple to go back to the original plan and in light of the live work play concept.”
Assimakopoulos isn’t claiming the office sector is finished, which is logical since Revetas has plenty of office space in its portoflio. “I don’t think people don’t want to be in the office,” he says. “I think they don’t want to commute.” (That fits nicely into the residential building he now plans to build next to eight office buildings and a shopping center in Bonarka 4 Business.)
If things go to plan, Revetas will build the three apartment buildings and then operate them under a single platform. “There are several investors who want to somewhere between 20,000 and 40,000 units,” he says. The idea is to assemble a package of 2,000 or more units and then sell the platform. Each asset is likely to be held separately, in case it turns out to be more advantageous to sell them individually. Assimakolpoulos hints that he’s been holding talks with a potential investor and that there appears to be ”plenty” of capital looking to get involved in such ventures.
Is it a good time to be building, given ongoing construction cost inflation? “I don’t have a crystal ball to say now is the right time to build,” he says. “I do know that now is the right time to have rental properties.”
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