Cavatina Group is increasingly balancing its established office business with rapid growth in residential and institutional rental housing. Daniel Draga, CEO of Cavatina Group, discusses the company’s expanding residential pipeline, the role of institutional capital, changing dynamics in the office market and how financing conditions are shaping its approach to future development.
Cavatina has evolved significantly from its origins as an office developer, with residential and institutional rental now becoming increasingly important parts of the business. How do you see the balance between these different segments developing over the next few years?
We do not read this as a retreat from offices into residential, but as building a platform in which three segments discharge distinct financial functions. The model I ultimately envisage is one where residential supplies momentum, offices supply stability, and PRS bridges the two — built like housing, earning like an office.
Offices — fourteen buildings, close to 95% let — are the income-producing core: an asset an investor can underwrite and verify. Residential compounds fastest: the Group sold almost 1,500 units in 2025, and the portfolio has passed 11,500 apartments across nine cities, almost 5,500 of them delivered or under construction. Institutional rental sits with Cavare — eight schemes, over 1,500 units.
Residential will outgrow offices in the coming years. But offices remain the ballast of the balance sheet — the source of borrowing capacity and visibility without which a dozen concurrent sites are unmanageable.
Your residential activities accelerated strongly in 2025, and the pipeline now includes over 10 thousand apartments. What is driving your confidence in further residential expansion, and which Polish cities offer the greatest potential for growth?
That conviction rests not on a market forecast but on two assets already in hand. The first is land: much of the pipeline draws on our own bank and on schemes originally consented as commercial. We are not bidding for sites in a market where the premium on planning certainty keeps widening.
The second is the operating model: land, design, contracting and sales are all held in-house. With over three thousand apartments being built simultaneously, that is a matter of deliverability rather than margin. The first half of 2026 brought more than 770 signed contracts, our strongest on record.
The greatest potential lies in three markets opened this past year. Poznań is a joint venture on the former Malta Gallery site — a green, mixed-use quarter on the lakefront. Kraków is a full-scale residential programme after years of office-only presence; Szczecin is our newest market. We continue to expand in Warsaw, where Liberty Tower by Cavatina — a 140-metre tower among Poland's tallest — is rising, and in Wrocław, Łódź, Katowice and Bielsko-Biała.
Fidera Vecta invested nearly PLN 200 million in Resi Capital, bringing an external institutional equity investor into the Group for the first time. What does this partnership enable you to do differently, and could you open other parts of the business to institutional capital in the future?
The transaction has three layers, and only one is money. The capital layer: the fund subscribed for newly issued Resi Capital shares worth €47.5 million — the first time an institutional investor entered the Group as equity rather than debt. Operationally, those proceeds opened three new markets. Equity funds schemes at the earliest stage, before debt is available.
The decisive layer is validation. The fund conducted full due diligence on the portfolio, the cost base and our execution capability before committing — an independent appraisal other financing counterparties cannot discount.
Will we open other parts of the business? Institutional rental already has: Cavare works with Urban Partners under forward funding, and two agreements this year take the Lett platform to 646 units in one Gdańsk complex. The structure is repeatable — clear evidence it can travel further.
Despite the challenging office market, Cavatina's portfolio maintained close to 95% occupancy while rental revenues increased significantly in 2025. What does this tell you about the type of office product that can continue to perform well in today's market?
Principally, that the office market is not weak — it is discriminating. Demand has not contracted; it has concentrated. Tenants are vacating older stock for new, certified, well-run buildings, because the office now serves as a recruitment instrument and a reason to return to it. Our portfolio sits where that demand gathers: delivered within the last decade, in six cities where new supply has all but ceased.
Add a factor that seldom surfaces in market statistics: fit-outs. With an in-house design studio and contracting arm, we hand over ready space faster and more cheaply than a developer who subcontracts. Where a tenant's decision turns on occupancy date and fit-out budget, that is a tangible edge.
What performs is product that is new, certified, well located and owned by someone able to prepare space quickly. The rest of the market faces the cost of deep refurbishment — or conversion.
Cavatina Holding has around 92,000 sqm of commercial development potential in its land bank, with some sites potentially being converted to residential. How are you deciding today whether a site should remain office-led or be redirected towards another use?
The starting point is always the highest and best use of the land, not the function written into a scheme five years ago.
An office remains an office where we see genuine occupier demand and the scheme can sustain stable NOI at high occupancy — a short list of locations today. Beyond it, capital rotation decides: at prevailing yields, residential returns capital faster, so it wins by default. A new office scheme would have to be large and typically part of a mixed-use development — smaller schemes forfeit the advantage our in-house contracting confers. And since the planning reform, the consenting path determines whether a conversion is viable at all.
We have proof the approach works. Quorum Tower in Wrocław began life as an office scheme and is today one of our two flagship premium towers.
Cavatina refinanced its office portfolio with a €270 million loan from a consortium of international banks last year. How has the financing environment for real estate changed, and are lenders becoming more willing to support new development and growth?
The facility was above all a housekeeping exercise: in place of a dozen project loans with staggered maturities, we now have a single, predictable structure, a lower cost of funding and the principal maturity extended to end-2030.
What does that say about the market? Bank capital has returned, but on narrow terms. Three foreign lenders underwriting one Polish office portfolio is a signal we would not have seen three years ago. The precondition was a completed, let portfolio with a demonstrated cash-flow record. This is not renewed appetite for development risk — it is renewed appetite for income.
Financing for new development is available too, though more dearly priced for risk: lenders expect higher pre-letting or pre-sales and a larger equity contribution. That is the gap institutional capital fills — equity goes where debt is not yet willing to follow. The bond market tells the same story: the latest series priced inside previous levels.
