Q: What is Warsaw's business proposition today?
A: We have become a very serious market for foreign investment. We had lower GDP than other eastern European cities such as Prague and Budapest and a worse job market, but now we are treated as part of the Polish success story because Warsaw has emerged as the strongest and fastest developing economy in Poland. We were always attractive as a city for companies that wanted to enter the Polish market, now we have become appealing also for those companies looking to set up a regional headquarters due to good connections and stable economic cycle.
Q: Only few years ago Warsaw seemed to be struggling to appeal to foreign investors…
A: We experienced very chaotic development until 2005 because we lacked a coherent strategy to attract big companies. Then we launched our investment strategy in 2006. Back then our main disadvantage was that we didn’t have enough office space with a stock of 2.6 million square metres (sq m). Today we are at 4.6 million sq m and we are aiming to reach 6 million sq m in the next few years. The overall office stock in Kraków, the country’s second largest city, does not go beyond 700,000 sq m. Further south, Prague office stock is 3.1 million sq m, Budapest’s is around 3 million sq m.
Q: What is driving demand for the new office space?
A: There are two main types of companies interested in setting up operations in Warsaw. There are companies looking for a country or regional HQ, mostly belonging to the financial, insurance and consulting sectors, which are still growing on the back of the expanding local market. Then we have R&D companies, outsourcing centres, but not typical business services. We are too expensive to be attractive for back office operations. These companies come here to install their middle office operations, which are partly responsible for the development of the same companies – Samsung, for example, relocated its R&D functions here, which had previously been dispersed around the country.
Q: What would you say is Warsaw’s competitive advantage compared with other Polish cities?
A: Our workforce is better than in other cities because the best universities are here. A second thing is the city’s quality of life. During the transformation period in the 1990s, we always struggled to match the quality of life of other European cities. However, in the past 10 years we doubled the number of restaurants and the range of leisure activities has greatly increased. Also, from a real estate perspective, there is much space in Warsaw’s downtown for redevelopment as that area is quite new – it was entirely rebuilt after the Second World War. This is pretty unique because European cities tend to have old downtown areas where redevelopments are more difficult.
Q: Some investors faced legal troubles in redeveloping some areas though, like Irish Global Partners Investment Fund, whose rights to redevelop the Robotniczy Klub Sportowy (Skra) stadium were scrapped with little notice. What is the municipality’s position on that?
A: Those conflicts originated in the 1990s, when nobody cared about urban planning. The current administration came into office in 2006 and decided that some of the areas ought to be protected. The Skra lies close to one of the city’s largest green areas, and we decided to keep the green area protected according to new urban plan. This happens when the interests of urban planning clashes with the interests of investors.
Q: What is the profile of the foreign investors you want to attract in the years to come?
A: Warsaw will remain a big market for financial, insurance and administration services, which is the natural market for capital cities, and we expect those functions to develop. We also want more companies to come here for the quality of local workforce, like R&D in sectors such as biotech and technology. We want investors to be choosing Warsaw on the basis of our stable, long-term vision rather than simple price convenience.