There is a need to be highly flexible in the land market

‘Pure’ plots are already hard to come by, non-obvious land whose function can be changed is in demand, says Daniel Puchalski, managing partner at Immo Lab.

PLN 480 million in the three quarters of this year and PLN 270 million in Q4 is the value of land transactions made and planned with your participation, respectively. How does this value compare to previous years? If we look at more than ten years, the value of land market transactions closes with amounts between PLN 2 and 4 billion, depending on how we count. If one were to add to this the share transactions - purchases of companies which own land - the amounts could be higher.

Our result this year compares very well with the previous one, when the value of transactions with our participation did not even exceed PLN 100 million. Negotiations dragged on, after all there was still fear related to the war in Ukraine, there were not many transactions.

It should be noted that the structures of the transaction portfolio are quite different than they used to be. Indeed, we hear that the land market is tough, that it is becoming increasingly difficult to acquire land. Therefore, the market has started to be more flexible, and we went in this direction much earlier - the search for a second life for real estate. So we're dealing with properties that have one use, for example industrial, but if you can convert the planning, for example for the living sector, then after a few years such land can be worth three or four times as much.

Sometimes it's about changing the function of an existing building, sometimes it's about consolidating several smaller plots of land. We also have to take into account that planning laws are changing. Some people are helped by this, others the opposite. Unfortunately, there is always someone disadvantaged or someone very happy. One provision can lead to a significant loss of land value - or the other way round.