Lofts – a small part of the real estate market or a huge boom for extravagant housing?
31 January 2019
Despite many failures meeting developers who offer lofts, they have a chance to survive on the real estate market – experts say. Although the demand for them is minimal and the construction of this type of expensive real estate, they may be a niche for affluent and extravagant clients in large cities.
A few years after becoming visible on the domestic market, lofts continue to notice an increase in customer interest – experts in the real estate market say. The first investments of this type of real estate started to be built in 2006 (eg Tkalnia in Zielona Góra). Over the years, their development accelerated – developers began to arrange old factories, for example in Łódź, Poznań, Warsaw, Wrocław or in Żyrardów.
However, a large number of these projects ended in failure – owners’ bankruptcy or suspension of work. An example would be the bankruptcy of MNE Investment (the company – the owner of 220 apartments in “Lofts at Scheibler” in June 2012, and Green Development (200 apartments in “Nowa Przędzalnia” in Żyrardów) three months later. The rest of the investors and developers also face difficulties, which consequently resulted in several years of delays. This is the case of two Warsaw investments: on ul. Szwedzka and in the former PZO factory at ul. Grochowska.
Lofts are a subordinate part of the real estate market. Developers who decide to build them are too rare to meet the needs of the market, because there is no such demand. If this is the basic investment of a given developer, he may have problems – some experts say.
Lofts must meet many conditions. First and foremost, it should be located in a restored and high-standard historic factory space. A characteristic feature of this type of real estate is its space, flats in the loft should be large – about 100 sq m and be significantly higher than standard apartments – about 3 – 5 m. It is important to see fragments in the apartment giving a sign about the factory past of the building – old parts of equipment or finishing.
The fulfillment of these standards has an impact on the high price of lofts and the limitation of their supply. – In our cities there are not many factory buildings that are adaptable. Conversely, it happens in the West, in comparison, in Poland they are small – even from 30 sq m.
The location of real estate is also a problem of a large part of the investment. For example, a missed investment is an old flax factory in Żyrardów at a distance of 40 km from Warsaw. According to experts, residents of big cities wanting to move out think more about a house with a garden, and not a different form of flat in a block. In addition, in Poland in the post-war years, factories were unused, so their renewal is very expensive.
However, despite these obstacles, the loft housing market in Poland will continue to grow. According to experts, they will continue to enjoy interest, however, still a small part of customers. It is a unique, extravagant product for a specific client and developers are unlikely to withdraw from it.