Jacek Korwin-Małaszyński and Michał Korwin-Małaszyński, Members of the Board of APP Projekt, one of the leaders in construction engineering in Poland, have talked to Property Forum about the current situation on the property market, prices of the materials and the impact of the '2% Safe Credit' on the industry.
In the first half of 2023, you were mainly involved in warehouse projects. We understand that the investment train in the logistics market is still not slowing down.
Jacek Korwin-Małaszyński: As a rule, the logistics market in the area of new projects has slowed down somewhat. On the other hand, our experience and cooperation with various entities in this sector allow us to state that investments are still being made, although we can see less activity on the part of investment funds.
What is the current situation in the building materials market in Poland?
Michał Korwin-Małaszyński: At present, there is stabilisation in the prices of construction materials and there are no problems with their availability. Minor increases in some materials are expected in the fourth quarter, but they will be at an acceptable market level.
Let's move on to the housing market. What is the biggest call on such projects at the moment?
Jacek Korwin-Małaszyński: The biggest challenge from APP-Projekt's perspective is the increasing awareness of the quality of work and documentation on the part of both the investor and the clients - that is why we put a lot of emphasis on supervision work. A proprietary project management application helps us to do this. It speeds up the work and ensures that we focus on the significant challenges of the investment.
What impact will the '2% Safe Credit' have on the general contracting market? Will developers significantly increase the supply of the cheapest units that meet the pricing criteria of this programme?
Michał Korwin-Małaszyński: It is difficult to answer this question unequivocally. Certainly, the launch of the '2% Safe Credit' programme will have a positive impact on the entire industry. When conducting tender procedures, we can see that in general contractors are 'hungry' for orders and price competition is huge. This is a welcome situation for investors, but will not necessarily be good for the industry in the long term.
ESG in construction - still a whim of investors or already a new standard?
Jacek Korwin-Małaszyński: We think this is the right direction and are developing this sector of activity ourselves. Our employees receive training in this area in order to best carry out ESG or closed-loop economy processes in the real estate market. The costs of investments designed and carried out in accordance with ESG guidelines will increase - a natural consequence of the new direction the industry is taking. On the other hand, however, this approach allows us to take care of our common interest: a cleaner environment and a better quality of life for future generations. Even a small progression in a building with care for the environment will benefit everyone involved.
Given the high level of uncertainty in the markets, aren't banks reducing financing for general contractors?
Michał Korwin-Małaszyński: Uncertainty in the market is one of the considerations that banks will take into account. We are seeing a situation where banks are more cautious about providing bank guarantees and guarantee lines for general contractors in general. This may, of course, be an opportunity for other financial institutions that offer security for construction contracts.
What investment plans does APP Projekt have for the next 12 months?
Jacek Korwin-Małaszyński: From the perspective of its own investments, APP Group is investing in new technologies that significantly improve the quality of engineers' work - I have already mentioned the building application - the defects and faults management module is currently in operation, and two more - focused, among other things, on the implementation of changes in projects - are being completed. At the start of the new year, our employees and customers will benefit from the further facilities that the expanded application will provide. The second pillar of our plans is our involvement in development or investment projects. In 2023, the company acquired a hotel property in Karpacz and intends to carry out such activities, obviously on the scale of its capabilities.
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