Ladies and Gentlemen!

I am pleased to provide you with the next issue of CPRF Newsletter. According to the property market situation the current edition continues topics from the last CPRF Newsletter dated 02/2009 and regards areas associated with the financing of commercial developments and development perspectives of the commercial property market in Poland. I encourage you to review the various blocks of the Newsletter.


Yours sincerely,
Roman Fortuna MRICS

As a result of turbulences in world financial markets, deteriorating macroeconomic indicators and a slowdown on the commercial property leasing market in Poland, the vast majority of financial institutions decided to suspend their credit policy, even till the end of 2009. Fortunately, not all banks turned the tap with money. Since the beginning of the year we have had a chance to observe commercial real estate financing transactions, which can be a sign of slow stabilization of the market. The banks prefer existing developments generating income, while financing new projects to a small extent, the so-called speculative, without an appropriate level of leased area prior to the first drawdown of a credit. The question arises as to what chances do investors / developers have to obtain finance for the construction? What collaterals and conditions have to be fulfilled prior to the first tranche of a loan?

The RICS Valuation Group Board issued the “Valuation Information Alert” regarding “Guidance to Lenders and Valuers when conducting Loan Security Valuation Reviews” at the end of May 2009. This gives guidance to both valuers and lenders on the advice that can be provided when conducting loan security valuation reviews of commercial property in circumstances when values are changing rapidly. It focuses on issues to be considered and reported upon in looking at the future prospects for a property. It is additional guidance when advice on a likely level of value is provided for the immediate period after the date of valuation. Lenders may request advice that not only focuses on the Market Value today, but also advice that looks forward into the immediate future. It is emphasised that in the rapidly changing market environment Market Value is the starting point for the provision of good valuation advice and any forward looking view must always be provided in addition to an opinion of Market Value in certain strictly defined circumstances.

A couple of weeks ago Royal Institution of Chartered Surveyors (RICS), which is a global organisation associating real estate professionals, issued recently the next quarterly commercial market survey. The survey was focused on showing global general trends at commercial propertied market. Does Warsaw office market undergo the same trends as at markets almost all over the world?

Financial and economic crises appearing recently in Poland are felt by everyone. Also we can see it on the real estate market. Wouldn’t it be easier to view modern office market through the only one value that is generally accessible for everybody – the average Euro foreign exchange rate? Through the juxtaposition of schematic Euro foreign average exchange rate with the vacancy rate existing in Warsaw we decided to consider observation of trends on the modern office market through the prism of fluctuation of Euro foreign exchange rate. We have obtained a clear correlation between them.