Built-to-Rent in Poland

Build-to-Rent
in Poland
an overview of the rental market and prospects for growth

2
www.thinkco.pl
Tomasz Bojęć
Przemysław Chimczak
Hanna Milewska-Wilk
Julia Kowalska
Dominik Różewicz
In Partnership With:
Build-to-Rent
in Poland
an overview of the rental market and prospects for growth

5
4
renting in Poland 6
the birth of the Polish rented sector 8
size of rental market 12
a profile of rental apartments 16
renters in Poland 24
renter profile 26
renting: it’s not just for young people 34
legal environment 38
tenancy regulations 40
types of rental agreements 44
institutional rental market 50
build to rent 52
institutional renting in Poland 58
standardy w budynkach na wynajem 66
renting in other european countries 72
xxx 74
build-to-rent architecture 88
noteworthy build-to-rent brands 102
prospects for the rental market 118
why do we need a rental market? 120
key areas of development 124
przypisy 130
written in partnership with 132
about us 134
contents

9
8
Build-to-Rent in Poland | perspektywy rozwoju rynku prywatnych akademików
Apartment rental has been a part of the
Polish housing market for many years,
mostly independent of legal regula-
tion. Due to post-World War II efforts
at nationalization, the privatization of
apartments after 1989, and subsequent
government administrations’ lack of in-
terest in the rental sector, we do not have
reliable, comprehensive data to quantify
this booming segment of the real estate
market. The only sector that is well doc-
umented with official statistics is that of
the public and social housing belonging
to TBS (Public Building Societies). In
result, the available data paints a signifi-
cantly distorted picture of the market
The first laws regulating the taxation of
rental income earned by individuals were
not enacted until 2003. In the first year
following the introduction of a lump-sum
tax on rental income, 38,999 taxpayers
filed returns of this type.1
It was then that
the dynamic growth in the number of
individuals renting out apartments was
noticed. How did this group first emerge?
evolution of the rental
market
The earliest structures of the Polish
rental market that emerged after the
fall of communism were based on a
bottom-up phenomenon, namely, apart-
ments inherited from the owner’s parents
or grandparents. Beginning in the late
1990s, a growing number of individuals
in their forties and fifties began inheriting
apartments that, before 1989, had been
inhabited by their parents. During this
period of privatization and the develop-
ment of a capitalist economy, such flats
could be purchased for a fraction of their
price. Many of them were relatively large
properties in desirable locations.
We do not know how many such apart-
ments came to form the accidental
foundation of the private rental market.
Unused by their owners but also not list-
ed for sale, these properties ended up on
the rental market, initially in cities with
major universities. They were offered as
low-standard apartments, unrenovated,
typically with a complete set of furniture
in the form of a wall unit. This phenome-
non continued to grow, feeding more and
more apartments into the rental market.
By the early 2010s, it had become appar-
ent that people who delayed selling their
inherited properties—out of choice or
necessity—had profited from the appre-
ciation of their real estate.2
Not counting
brief downturns in the late 1990s and in
the wake of 2008, real estate prices have
risen steadily for nearly thirty years. Indi-
viduals who decided to retain their prop-
erties and rent them out were rewarded
with a stable source of passive income.
the birth of the polish
rented sector
DEFINITIONS
Property rental
A legal relationship in which
a landlord grants a tenant
the right to use the proper-
ty, for a specified or unspe-
cified period, in exchange
for payment in the form of
rent. The landlord is obliged
to provide the property to
the tenant in a condition
suitable to its intended use,
and to carry out required
maintenance throughout
the duration of the lease.
The tenant is obliged to
pay rent, to use the items
belonging to the dwelling
in the manner stipulated in
the rental agreement, and
to keep the interior of the
property in good repair.
Landlord
A person with the right
to use and dispose of a
property based on a title of
ownership or contractual
agreement (loan, mana-
gement agreement, and
others), or the autonomous
possessor of a property. The
landlord is the party to the
agreement who provides
the property to the tenant
and collects rent.
Market rental rates grew so quickly that it
even became profitable to renovate and
refurnish apartments. Landlords began
adapting their dwellings to the needs of
their tenants, particularly young people,
who invariably form the basis of the rent-
al market.
The high returns offered by rental prop-
erties spurred the emergence of another
phenomenon: investment purchases.
Growing prices meant that money in-
vested in real estate earned higher yields
than deposits and other financial prod-
ucts. Landlords additionally profited from
rents, whose rise paralleled that of real
estate prices.3
For many people, owning a
rental apartment was therefore the ideal
way to store equity. The first investment
purchases took place before the 2008
financial crisis, and the ensuing recession
did little to curtail growth in this sec-
tor. Renting only became more popular
during and after the financial crisis: the
number of students seeking rooms and
apartments was rising, mortgages had
become more difficult to obtain, and the
number of properties being built dipped.
The rental market was growing faster
than legislators had predicted. The num-
ber of taxpayers filing returns on rental
income was skyrocketing, and the lower
interests rates fell, the more people were
eager to invest in various forms of real
1 source: Unsplash
Tenant
In a rental agreement, the
party who rents a property
in exchange for payment;
the tenant is permitted
to use the dwelling in the
manner specified in the
agreement, and is required
to keep it in good repair and
sanitary condition.
Rent
Payment, typically in mo-
netary form, made by the
tenant to the landlord in
furtherance of the rental
agreement, traditionally on
a monthly basis, in advance.
Rent does not usually inc-
lude utilities, but the total
value of both is sometimes
provided in rental listings.
2010 2011 2012 2013 2014 2015 2016 2017 2018
15 M PLN
10 M PLN
5 M PLN
marginally taxed
income
lump-sum taxed
revenue
Compiled by ThinkCo, based on data provided by the Ministry of Finance and calculations by Hanna Milewska-Wilk
REVENUE FOR PRIVATE RENTAL

11
10
Build-to-Rent in Poland | the birth of the Polish rented sector
estate, prompting warnings in recent
years from oversight authorities such as
UOKiK (Office of Competition and Con-
sumer Protection) and KNF (Polish Finan-
cial Supervision Authority).4
The demand for apartments and other
rental properties was first noticed by
developers, who began to weave it into
their market narratives, presenting the
purchase of real estate as an investment
opportunity. The National Bank of Poland
first mentioned it in its 2016 quarterly
reports.5
Despite the cancellation, in
2018, of the program “Mieszkanie dla
Młodych” (Apartments for Young Buyers),
which had been launched with the goal
of stimulating demand, no decrease in
interest or number of transactions was
observed in the primary market. The high
demand for investment properties was,
by that time, well known in the residen-
tial market, accounting for up to 40% of
all purchases.6
The charts provided in
the National Bank of Poland’s Q4 2019
report show that, according to data from
the sales departments of real estate de-
velopers and brokers, investment proper-
ties may have made up at least 40% of all
apartments purchased in Warsaw.7
apartments in
institutional hands
The accelerating development of the
rental sector provided additional en-
couragement to foreign capital markets,
which had been observing Poland closely
for several years. This generated demand
for a turn toward increased professional-
ization in the market. Its beginnings are
marked by several legal developments:
Compiled
by
ThinkCo,
based
on:
NBP
2019,
JLL/REAS,
GUS
the Act of September 27, 2013, per-
mitted companies to rent out properties
through occasional tenancy agreements;8
2015 saw the launch of the Rental
Apartment Fund;9
and 2017 legislators
amended the Act on the National Real
Estate Fund to permit occasional tenancy
agreements.10
The current state of the Polish apart-
ment market resembles that of its British
counterpart nearly a decade ago. It is
often more profitable to invest in rental
buildings and apartments than in com-
mercial properties; the conditions are
favorable, the pioneers in the sector have
reported good results, and the perception
of renting is changing among potential
tenants.11
Nevertheless, institutional
investors still face a high degree of un-
certainty due to the vague and incom-
plete data on the potential of the rental
market in Poland. Today, the professional
market doesn’t know how many tenants
are in the market for rental apartments,
where the limits of this market are, and
what tenants demand of such properties.
Based on the currently available data, it
is impossible to determine the degree to
which the decision to rent a particular
property is driven by location or other
factors.
This question is a significant one. It may
have little bearing on the purchase of an
individual property as an investment, but
the situation changes entirely when one
considers the purchase of entire build-
ings or real estate portfolios comprising
thousands of beds. Today, the investment
market is not asking whether it is profit-
able to build rental properties in Poland.
It’s asking what kind of apartments to
build, whether to compete with individual
landlords, and whether to offer a clear
alternative in terms of the quality of ser-
vice. These questions must urgently be
answered if we are to forecast the future
of the Polish real estate market. The evo-
lution of the rental sector is integral to the
development of a free-market economy,
as can be observed in our neighbors to
the west. The professionalization and
institutionalization of apartment rental
in Poland is taking place before our very
eyes.
source:
Unsplash
ESTIMATED DEMAND FOR APARTMENTS ON THE PRIMARY MARKET
(WARSAW AND POLAND’S SIX LARGEST CITIES)
20 000
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
18 000
16 000
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
In the first year
following the
introduction of
a lump-sum tax
on rental income
(2003), 38,999
taxpayers filled
returns of this
type. In 2018 there
were more than
600 thousand of
them.
investment demand
consumer demand
properties sold

13
12
Build-to-Rent in Poland | człowiek w centrum uwagi
private individual
size of the
rental market
2
A distinctive feature of the Polish rental
market is the division between low-rent
properties owned by communes (the
principle local administrative unit) and
the private sector, which is currently
dominated by individual landlords. Most
of these landlords are private individuals.
Other rental properties include apart-
ments owned by state-owned enterpris-
es, however, these are typically available
exclusively to government employees, at
discount rates. Although the private rent-
ed sector has been expanding for over 20
years, no comprehensive studies of this
market have been carried out, nor is there
any ongoing monitoring being conduct-
ed. Data on the number of tenants and
properties and the typical landlord profile
are sketchy and fragmented; a complete
image of the sector can only be compiled
from a wide array of disjointed studies
statistical data
According to data from Eurostat, Poland
ranks significantly below the European
average in terms of the percentage of
households inhabiting apartments based
on rental agreements.12
The statistics for
2018 show that renters made up 15.8%
of all households, with 11.6% of respon-
dents stating that they rented their dwell-
ings at a reduced rate through public and
social housing (TBS) arrangements, while
4.2% of tenants rented their homes on
the open market. These data reveal that
the overwhelming majority of rentals in
Poland are reduced-rate accommodation,
a reversal of the statistical average in 28
European countries, where free-market
rentals account for 22.0% of all house-
holds, while 8.7% involve rent reduction.
Additionally, data published by GUS
(Central Statistical Office of Poland),
which only collects information regarding
a household’s housing tenure during cen-
suses, indicates that fewer than 17% of
respondents rented their dwellings, and
only one of four members of this cohort
rented from private individuals.13
These
data raise doubts when one considers the
Compiled
by
ThinkCo,
based
on:
GUS,
“Warunki
mieszkaniowe
gospodarstw
domowych
i
rodzin.
Narodowy
Spis
Powszechny
Ludności
i
Mieszkań
2011”
(Living
conditions
of
households
and
families.
National
Census
of
Population
and
Housing,
2011),
Warsaw
2014
source: Unsplash
public and TBS housing stock in Poland,
as well as the apartment sales results
published by developers, who report that
nearly 40% of all purchases are made as
investments.14
When collated, this infor-
mation gives reason to doubt the reliabil-
ity of the 4–5% free-market rental rate in
Poland—even if we consider the numbers
from the primary market to the exclusion
of the remaining data.
customs vs. statistics
The data on tax revenue show a much
larger rental market than do the reports
by Eurostat and the Central Statistical Of-
fice of Poland (GUS). In 2018, tax returns
for rental income were filed by 775,000
taxpayers,15
marking yet another increase
rentals and sublets
16,92%
HOUSEHOLDS BY FORM OF HOUSING TENURE
APARTMENT RENTALS BY OWNER
71,42% – ownership or
cooperative ownership
2,11% – Other entities
9,46% – family relations 3,47% – Undetermined
8,14% – State Treasury
0,46% – other
2,99% – Housing cooperative
3,74% – Public Building Society
1,75% – undetermined
8,48% – enterprise
commune
45,58%
25,49%
30,7% 22,0% 8,7%
renting in 28 EU
states (2018)
free market reduced rate
source: Eurostat, “Distribution of population by tenure status,” 2017 table (ilc_lvho02), https://bit.
ly/3jRtoqp, (accessed: July 29, 2020)

15
14
in the number of renters and declared
revenue, year over year. It is important to
note, however, that the data on the num-
ber of tax returns only pertain to private
individuals, and provide no information
on company-owned properties. Further-
more, taxpayers do not list the number of
apartments owned in their returns, only
their taxable revenue.
It is worth noting, however, that the
available data regarding apartment rent-
als is likely underreported due to cultural
determinants and the lack of education
on legal and practical methods of ful-
filling the need for housing. Renting an
apartment continues to be regarded as
an unofficial agreement between two
private individuals, and both parties may
be uneasy about reporting the arrange-
ment. For this reason, many respondents
may mislabel their housing arrangements
as “living with their parents,” for example,
despite the fact that they have a rental
agreement. The gray market is perceived
as being beneficial to both sides of the
arrangement. In light of these issues, we
view the presented data with a signifi-
cant amount of skepticism.
data on professional
rental housing
There are only a few entities operating
in the nascent field of institutional rental.
The total number of new Build to Rent
buildings is currently several dozen prop-
erties, with a stock of fewer than 4,000
units. This accounts for no more than a
small percentage of the actual demand
on the rental market, but what should be
noted is the significant shift with regard
to management, legal regulations, apart-
ment standards, and tenant services.
Keeping in mind the bottom-up devel-
opment of the market, it is worth men-
tioning smaller investments in buildings
with rental apartments, which the current
statistical data overlooks. The majority
of these properties are small blocks of
flats or old townhouses, containing a
few to 40 units each. Another phenom-
enon involves organized investments in
dispersed apartments. The number of
properties in this sector, which straddles
the boundaries of private and institutional
rentals, remains unknown. Nevertheless,
this phenomenon may prove crucial to
the development of of the rental market
outside large urban areas, which rarely
attract the interest of investment funds.
NUMBER OF TAX RETURNS LISTING RENTAL INCOME
2012
2013
2014
2015
2016
2017
2018
200 000
0 400 000 600 000 800 000
dwellings rented
at market price
PRIVATE RENTAL MARKET IN POLAND
calculation method:
8,3%
1,21 mln
of the total
housing stock
4,3%
14,482 mln
c. 622.700
775.694
1.163.540
of households rent their dwellings at market price (Eurostat, 2018)1
estimated number of households in Poland2
thus of households rented their dwellings in 2018
taxpayers reported income from renting or leasing at least one property in 2018.
This contradicts the estimates of both Eurostat and GUS regarding the rental market.
estimated average number of rented properties owned by taxpayers.
1,5
estimated number of rented dwellings.
of the rental market is in grey area. It can be safely taken into account in the
estimates as 4% of all rented dwellings (48,481).
We estimate the number of dwellings rented at market price for at least
1.210.080so 8,3% of the total housing stock.
2–8%
Compiled
by
ThinkCo,
based
on
data
provided
by
the
Ministry
of
Finance
and
calculations
by
Hanna
Milewska-Wilk.
marginal tax,
supplementary income
marginal tax, sole
source of income
lump-sum tax, self-
employed with other
income
lump-sum tax, sole
source of income
1.
Eurostat,
table
(ilc_lvho02)
2.
GUS,
Rocznik
Statystyczny
Rzeczypospolitej
Polskiej
2019,
tabela
3
(214).

17
16
Build-to-Rent in Poland | zmieniające się potrzeby użytkowników
a profile of rental
apartments
3
To create a profile of rental apartments in
Poland, we analyzed large datasets that
enable us to sketch a broader perspective
of the market. The data presented below
were acquired from the Ada.place plat-
form, which we chose because it allowed
us to automatically filter out repeat listings
and to rate the standard of each unit using
machine learning algorithms. To achieve
the best possible results, we focused on
analyzing the rental market in large cities,
where it was possible to collect the vol-
ume of data required for averaging and
comparisons. Our analysis of a total of
about 229.9 thousand listings posted in
2019 covers 10 cities: Białystok, Bydgo-
szcz, Gdańsk, Katowice, Krakow, Lublin,
Łódź, Poznań, Warsaw and Wrocław.
type of Dwelling
The average area of rental apartments
listed in the examined cities was 45.7 m2
.
Statistically, the largest units were found
in Lublin (averaging 48.8 m2
), while the
smallest were listed in Łódź (averaging
42.6 m2
).
Small apartments make up the ma-
jority of rental units available. Houses
comprised 2.2% of all listings, while single
rooms made up 26%. The majority of
listings were for two-room apartments
(39.7%)
If we exclusively consider apartment
listings, 23.4% of them were for studios,
53.1% were two-room units, and 21%
were for three-room apartments, while
only 3% were for larger properties.
One- and two-room apartments com-
prised 76.5% of all listed rental units. The
share of large apartments (over 75 m2
)
has shrunk significantly in the last eight
years, down from approximately 40% of
listings,16
most likely due to the practice
of dividing properties into rooms and mi-
cro-apartments to rent out separately. The
result is a rise in the percentage of rooms
for rent, which now make up 26% of all
listings.
The large number of studios and
rooms is an answer to the demand for
independence at a relatively affordable
price. The market has responded to de-
mand, not just by dividing out rooms in
larger apartments, but also by augmenting
them with bathrooms and kitchenettes,
turning them into self-contained mi-
cro-apartments.
rental prices and
variability
The price to rent 1 m2
varied sig-
nificantly from city to city. At an average
of 46 PLN/m2
, Warsaw has the most
expensive rental prices in the country.
Somewhat cheaper are Gdańsk (42 PLN/
m2
), Wrocław (40.8 PLN/m2
), and Krakow
(37.8 PLN/m2
). The most affordable of
the large urban areas is Białystok, where
rents average 28.7 PLN/m2
.
The overall average monthly rent for
a two-room apartment in all the cities ex-
amined was 1,680 PLN, marking a steep
increase from the 2018 price of 1,378 PLN.
The average rent in 2019 for an
apartment in Białystok was 1,277
PLN, while the equivalent in Warsaw
was 2,194 PLN. Average rents outside
Warsaw remain below 2,000 PLN, but
above-average prices are observed in
Gdańsk, Krakow, and Wroclaw.
Rental prices have risen very steadily
since rents were first monitored precisely
based on data from rental agreements.17
The number of taxpayers declaring rental
income increased by 8% per year, from
fewer than 40 thousand in 2015 to more
than 60 thousand in 2018, 18
with no neg-
ative effect on the increase in rental prices.
Due to the pandemic and the prob-
lems arising from it, minor decreases
in rental prices have been observed in
apartment listings.19
A number of univer-
sity students and individuals employed
in sectors shut down by Covid-19 have
left their rented apartments and moved in
source:
Unsplash
source: Unsplash
with their families. With the sharp decline
in tourism, some owners of short-term
rental properties have moved their real
estate to the long-term rental market.
Furthermore, restrictions on travel and the
government-mandated extension of rental
agreements through the end of June led to
a reduction in the number of new agree-
ments.
Comparing the current situation to
the 2008 financial crisis, we expect rental
prices to fall slightly, if only because of the
reduction in income and purchasing power
among tenants. However, it seems highly
likely that, in a year or so, more people will
begin to rent apartments due to the lower
availability of the financial instruments
used to purchase real estate.
DATA PROVIDED
BY ADA.PLACE
We determined the
shape of the rental
market in Poland
on the basis of
an analysis of
229,900 property
listings, taking
into account 10
cities: Białystok,
Bydgoszcz,
Gdańsk, Katowice,
Kraków, Lublin,
Łódź, Poznań,
Warsaw and
Wrocław.

19
18
Compiled
by
ThinkCo,
based
on
2019
data
provided
by
Ada.place
(approximately
229.9
thousand
listings)
PERCENTAGE OF PROPERTIES
BY TYPE
DIVERSIFICATION OF APARTMENT LISTINGS AVERAGE APARTMENT RENTAL PRICES, 2018/2019
LISTED APARTMENTS BY NUMBER OF ROOMS
LUBLIN
0 PLN
500 PLN
1 000 PLN
1 500 PLN
2 000 PLN
2 500 PLN
BIAŁYSTOK
BIAŁYSTOK
GDAŃSK
WROCŁAW
WARSAW
KRAKOW
BYDGOSZCZ
KATOWICE
POZNAŃ
ŁÓDŹ
ŁÓDŹ
BYDGOSZCZ
KATOWICE
POZNAŃ
LUBLIN
KRAKOW
GDAŃSK
WROCŁAW
WARSAW
4 rooms
2 rooms 2019
5 and more rooms
3 rooms
studios 2018
0 25% 50% 75% 100%
2 rooms
studios
3 rooms
4 rooms
53,1%
23,4%
20,5%
2,8%
apartments:
rooms:
houses
71,8%
26,0%
2,2%
SNAPSHOT OF THE PRIVATE RENTAL
SECTOR IN POLAND (2019)*
*The
data
comprise
the
entire
rental
stock,
including
high-rise
apart-
ment
buildings,
townhouses,
tenements,
etc.
average price of a two-room apartment in the examined cities
average rent increase between 2018 and 2019
relative increase in rent prices between 2018 and 2019
average floor size of a rental apartment in the examined cities
percentage of two-room apartments as a proportion of all units
percentage of properties listed as having basic amenities
number of listings analyzed
1680 zł
36 zł/m2
332 zł
+25,3%
45,7 m2
53,1%
61,9%
229.858
average price to rent 1 m2

21
20
Build-to-Rent in Poland | a profile of rental apartments
0
10 000
10 000
30 000
40 000
PERCENTAGE CHANGE IN RENTAL PRICES, 2014–2020
PERCENTAGE CHANGE IN TRANSACTION PRICES ON THE PRIMARY MARKET,
2014–2020
SEASONAL FLUCTUATIONS IN PROPERTY LISTINGS (2019)
A poll of landlords revealed a crucial
parameter in residential renting: the va-
cancy period between tenants. Based
on data from other markets, the annual
vacancy rate was previously estimated
to be 8–10%, meaning that properties
are occupied 11 out of 12 months in the
year. By contrast, reports published by
REAS show that the time spent waiting
for a new tenant is measured in weeks.
No fewer than 42% of respondents find
a new tenant in one week, 27% wait up
to two weeks, and only 15% need up to
a month.20
It should be noted, howev-
er, that the poll was conducted among
members of the Mieszkanicznik Associa-
tion, an organization of the most profes-
sional individual landlords.
seasonal shanges in
listing volume
Significantly, the number of listing chang-
es over the course of each year. Seasonal
fluctuations are recorded in every city,
peaking in the summer apartment rental
season. In 2019, the greatest number of
listings were posted in July, August, and
September. In the record-breaking month
of July, the number of properties available
for rent was five times higher than in
December. Comparatively fewer listings
were posted in April and May.
One possible explanation for this trend is
the close association between rental pe-
riods and the academic calendar, forcing
tenants to move as their one-year leases
end. Summer vacation is also preferred
by working people, who then have time
to view properties and prepare the move.
The lowest number of listings were
added in months with extended holiday
periods: around Christmas, Easter (April
21, 2019), and the May 1–3 holidays. The
bump in listings recorded in March may
indicate the appearance of apartments
from the primary market, which are typ-
ically released at the end of the year, but
require finishing work and must be pre-
pared for rental.
January
February
March
April
May
June
July
August
September
October
November
December
Compiled
by
ThinkCo,
based
on
2019
data
provided
by
Ada.place
(approximately
229.9
thousand
listings)
source:
Hernan
Lucio,
Unsplash
Compiled
by
ThinkCo,
based
on:
Centrum
AMRON,
ZBP,
Report
by
AMRON-SARfin.
“Ogólnopolski
raport
o
kredytach
mieszkaniowych
i
cenach
transakcyjnych
nieruchomości
1/2020”
(National
report
on
apartment
mortgages
and
real
estate
transactions,
1/2020),
May
26,
2020.
2014 2015 2016 2017 2018 2019
Krakow
Gdańsk Poznań Łódź Katowice
Wrocław
Warsaw
2014 2015 2016 2017 2018 2019
60%
60%
40%
40%
20%
20%
0%
0%
-20%
-20%

23
22
standards and furnishing
A majority of the properties listed on the
market—61.9% of the entire stock—fall
into the basic standard category. Near-
ly 30% of the listings are classified as
premium standard due to the quality of
the interiors and the location. It can be
assumed that some of the higher-priced,
premium standard apartments are new
properties that are just entering the rental
market. These included newly renovated
units in older buildings, but with better
access to amenities and downtown areas.
Listings for basic and premium standard
dwellings account for over 93.6% of all
apartments available for rent.
High standard and luxury apartments
make up a comparatively narrow seg-
ment, amounting to merely 6.5% of all
listings nationwide. Such units are avail-
able in all cities, but the preponderance
of units are recorded in Warsaw, where
12.7% of the stock is high standard,
while 2% are luxury dwellings. The pres-
ence of these types of rental properties
may signal the maturing of the Polish
rental market, larger-scale investments,
and the targeting of real estate offers to
the most demanding tenants.
The standard listing form does not permit
the poster to specify whether the apart-
ment is furnished, partially furnished, or
must be entirely furnished by the tenants
themselves. A distinctive but gradually
changing feature of Polish rental apart-
ments is that they are fully furnished.
The estimated ratio of empty apartments
(with no furniture or appliances) is cur-
rently about 10% of all listings.21
APARTMENT
STANDARDS
Basic standard
lower-quality apartments
whose main benefit is their
affordable price
Premium standard
more attractive locations,
higher finishing quality,
and convenient access to
services and amenities
High standard
spacious apartments in
prestigious locations, made
using high-quality materials
Luxury
the highest tier of
properties, situated in the
most desirable locations
basic
high luxury
premium
61,9%
6% 0,5%
31,6%
PROPERTY VACANCY PERIODS
RENTAL APARTMENT
STANDARDS
<1 week
<2 weeks
<3 weeks
<1 month
42%
27%
10%
15%
<3 months
<2 months
<4 months
2194 PLN
47,7 m2
46,0 PLN
18,9%
1583 PLN
43,6 m2
36,4 PLN
13,1%
WARSAW
KATOWICE
LUBLIN
POZNAŃ
WROCŁAW
BYDGOSZCZ
GDAŃSK
ŁÓDŹ
KRAKOW
average rent (2019)
average floor area
average price per m2
rent increase, 2018/2019 (apartments)
RENTAL MARKET IN MAJOR POLISH CITIES (2019):
1671 PLN
48,8 m2
34,3 PLN
35,0%
1413 PLN
42,6 m2
33,2 PLN
31,4%
1729 PLN
45,7 m2
37,8 PLN
22,5%
BIAŁYSTOK
1277 PLN
44,6 m2
28,7 PLN
24,0%
1910 PLN
45,5 m2
42,0 PLN
21,4%
1428 PLN
46,0 m2
31,0 PLN
33,1%
1645 PLN
44,8 m2
36,7 PLN
25,7%
1948 PLN
47,8 m2
40,8 PLN
28,2%
POLAND
Compiled
by
ThinkCo,
based
on
2019
data
provided
by
Ada.place
(approximately
229.9
thousand
listings)
1680 PLN
45,7 m2
36,7 PLN
+25,3%

27
26
Build-to-Rent in Poland | ekologiczność budynków
renter
profile
4
RENTERS BY AGE
source:
Pixabay
source: Freepik
Renters are typically young, geographi-
cally mobile people who are still looking
for a good place to live and grow their
careers. They are drawn to large cities
and the opportunities they offer in terms
of study, work, and leisure. Most are sin-
gle people or childless couples.
In terms of their financial capabilities,
renters fall into one of two groups. The
first are budget renters seeking to oc-
cupy the cheapest properties possible.
The other are more well off, slightly
older, highly paid specialists whose ca-
reers make them geographically mobile.
According to the prevailing narrative,
renting is still considered temporary and
expensive, and settling down invariably
involves moving into one’s own apart-
ment or home.
Among free-market renters, 73.4% are
under the age of 30.22
The renting pop-
ulation is therefore dominated by age
groups whose members must be highly
mobile because they are still studying or
are taking their first steps towards a ca-
reer. Furthermore, this is the period in life
when many people enter relationships,
which are benefited by the flexibility af-
forded by renting.
Employed individuals make up the dom-
inant group of renters, at 40.3% of the
tenant population. The remaining two
groups shaping this market are students
(24.1%) and foreigners (22.6%).23
One
tenant can belong to several categories
simultaneously. When asked to describe
their tenants, landlords observed that
they were typically single people (31.1%),
childless couples (30.3%), or groups
of individuals (19.7%).24
These three
categories account for over 80% of all
tenants, once again demonstrating that
renting is common among new dwellers.
Financial and professional stabilization as
well as the formation of lasting relation-
ships are the most frequent reasons why
tenants go on to become homeowners.
46% of respondents listed changes in
their family structure (marriage, children)
as decisive factors, while 37.2% pointed
to financial means, that is, reaching a
sufficient level of income and savings.
People who use mortgages to finance the
purchase of real estate also care about
the conditions under which these loans
are offered.25
WHO ARE POLISH RENTERS?
are under
the age of 39
are single people
or childless couples
are employed
are foreigners
86,2% 61,4% 40.3% 22,6%
25-29
20-24
30-39
40-49
50-59
>59
15-19
37,5%
27,0%
12,7
4,9%
4,7%
4,2%
8,9%
Compiled by ThinkCo, based on: M. Rubaszek, “Kupić czy wynająć? Ankieta na temat preferencji Polaków dotyczących
formy własnościowej nieruchomości” (To buy or to rent? A survey of Poles’ preferences with regard to real estate
ownership), Warsaw 2016
source: M. Rubaszek, “Kupić czy wynająć? Ankieta na temat preferencji Polaków dotyczących formy własnościowej
nieruchomości” (To buy or to rent? A survey of Poles’ preferences with regard to real estate ownership), Warsaw 2016,
https://bit.ly/3gaMR3d (accessed: June 28, 2020).

29
28
Build-to-Rent in Poland | renter profile
source:
Unsplash
30,3%
C
H
I
L
D
L
E
S
S
C
OUPLE
FAMILY WITH
C
H
I
L
D
R
E
N
key considerations for
renters
The vast majority of renters in Poland,
82.7%, choose dwellings in multi-unit
buildings. The most commonly occupied
apartments range from 31 to 45 m2
in
floor area. Half of all renters inhabit a
single property for one to five years.26
For renters, the most important consider-
ations were the total cost of renting and
a location close to the downtown area or
their place of work or study. Secondary
factors included the quality of the apart-
ment and whether it was furnished and
equipped to their needs. When given the
option of selecting more categories, two
additional considerations become more
relevant: convenient local access to ser-
vices (listed as relevant by one third of
respondents) and the option to adapt the
unit to their own needs (mentioned by a
quarter of those polled).27
Rent price is a crucial factor, as the ma-
jority of renters report incomes at or
below the national average.28
Cost in-
creases or the need to additionally furnish
a dwelling could place an insurmount-
able burden on households with tight,
carefully planned budgets. On the other
hand, the data reveal the emergence of
high-income renters and people who
have chosen to rent out of a reluctance to
take on the long-term commitment of a
mortgage. This development may signal
a generational shift in the values ascribed
to renting, mortgages, and ownership.
RENTER HOUSEHOLDS BY TYPE
WHAT MATTERS MOST TO YOU AS A RENTER? CHOOSE ONE KEY REASON (N = 606).
31,1%
19,7%
9,3%
5%
4,7%
S
I
N
G
L E
P E R S O N
SEVE
R
A
L
I
N
D
I
V
I
D
U
A
L
S
O
T
H
ER
S
I
N
G
LE PARENT
18%
location:
near work / school
5%
option to adapt the unit
to fit my needs
12%
location:
proximity to city center
5%
location:
convenient access
to services nearby
34%
cost of renting
7%
no long-term commitment
to one place
9%
standards and
furnishings to my liking
3%
I don’t have to worry
about maintenance in the
unit or the building
Compiled
by
ThinkCo,
based
on:
REAS,
Stowarzyszenie
Mieszkanicznik,
Najem
mieszkań
w
Polsce.
Właściciele
indywidualni
–
umowy
i
najemcy
(Apartment
renting
in
Poland.
Private
owners—agreements
and
tenants),
2018.
Compiled by ThinkCo, based on a CAWI study conducted in February 2020 for Vantage Development by BEELINE
Reasearch&Consulting, on a sample of 917 residents of Warsaw, Wrocław, Łódź, Poznań, and Szczecin.

31
30
renting vs. buying
The “renting vs. buying” debate plays out
across several dimensions: social pref-
erences for particular values and forms
of habitation; individual preferences; the
sense of security and stability of one’s
dwelling; and, finally, the purely financial
dimension. Polish society values own-
ership higher. Over 80% of individuals
polled expressed the opinion that pur-
chasing a property was more cost-effec-
tive than renting.29
Why does renting get such a bad rap?
Discussions of the benefits and draw-
backs of renting and buying often elicit
the remark, ”I only rent because I can’t
afford to buy.”30
This opinion was preva-
lent among individuals polled by Czerniak
and Rubaszek in a 2016 study (61.5% of
respondents mentioned their inability to
buy), and in the most recent study com-
missioned from BEELINE Reasearch&Con-
sulting by Vantage Development (“I can’t
afford an apartment of my own”: 41%).
Most renters consider paying rent to be a
waste of money (43.8%) or the inefficient
use thereof, offering no lasting equity
(78%).31
The benefits of renting include factors that
pertain to a renter’s personal experienc-
es, particularly its flexibility. Whether the
person in question is a student or young
professional, renting affords him or her
the option to move on short notice. The
amount of red tape involved in renting is
minimal: moving into a rental is as simple
as signing a lease and paying a security
deposit, with no lawyers, banks, or oth-
er institutions involved. The formalities
can be taken care of almost immediately.
Recent studies reveal the growing impor-
tance of not having to invest in a property,
renovations, and maintenance, i.e., conve-
nience without commitment.32
Newer data
also demonstrates the unwillingness of
some renters to take on mortgages. Con-
venience and lack of commitments are not
high on the list of reasons for renting (6%),
but they point to renter needs that may
evolve in the future.
RENTERS BY EMPLOYMENT STATUS
employed
students
non-EU foreigners
foreign EU nationals
companies seeking employee housing:
retired, on disability or receiving benefits
company involved in commercial activity
40,3%
24,1%
13,1%
9,5%
6,0%
4,1%
2,9
With time, however, certain benefits may
become drawbacks: flexibility entails the
lack of stability, each annual extension of
a rental agreement can come with a rent
hike, and moving, settling in, and adapt-
ing to new locations becomes tedious.
The lack of housing stability and greater
control over a dwelling’s interiors are two
REASONS FOR RENTING
THE CURRENTLY INHABITED UNIT
It is a truism to say that the modern world is con-
stantly changing. What’s more intriguing, however,
is how people cope with this process. Do they follow
changes? Do they actively shape them? Or do they
stand in opposition to them? 41% of respondents
state that their main reason for renting is that they
simply cannot afford to buy a property of their own.
This comes as no surprise, considering the steadily
rising apartment prices in Poland and the hefty down
payment required to qualify for a mortgage. On the
other hand, 56% of respondents value the convenien-
ce, flexibility, and lack of commitment that comes with
renting, as this leaves open the possibility of moving
to a different town or switching jobs with less hassle.
The ongoing shifts in consumer attitudes and awa-
reness offer an opportunity to create new products
and services. In fact, many companies—including our
own—are doing just that.
For both groups mentioned above, institutional ren-
ting offers a viable alternative to buying. It satisfies
their need for housing while also guaranteeing
stability when they need it (clear terms, long-term
agreements), and the flexibility to make important life
decisions.
of the main reasons why people consid-
er renting to be a transitional stage to
apartment ownership.33
41%
13%
6% 6%
5%
16%
10%
2%
I can’t afford a
place of my own
I’m flexible and I
don’t know where
I’ll be in a few
years
I don’t like long-
term solutions such
as mortgages
I don’t want to
become attached to
particular location
I’m in school/
university and I
don’t know where
I’ll be working in a
few years
I value the convenience
of not having to
perform maintenance
or repairs
I have to move
frequently for
work
Other
The advantages
of renting an
apartment include
flexibility of living,
simple terms and
no need to take
care of the repairs.
Dariusz Pawlukowicz
Vantage Rent
Compiled
by
ThinkCo,
based
on:
REAS,
Stowarzyszenie
Mieszkanicznik,
Najem
mieszkań
w
Polsce.
Właściciele
indywidualni
–
umowy
i
najemcy
(Apartment
renting
in
Poland.
Private
owners—agreements
and
tenants),
2018.
Compiled
by
ThinkCo,
based
on
a
CAWI
study
conducted
in
February
2020
for
Vantage
Development
by
BEELINE
Reasearch&Consulting,
on
a
sample
of
917
residents
of
Warsaw,
Wrocław,
Łódź,
Poznań,
and
Szczecin.

33
32
ARGUMENTS FOR
RENTING PROPERTY:
ARGUMENTS FOR
BUYING PROPERTY:
KEY FACTORS FOR RENTERS
agree disagree
BUYING IS MORE COST-EFFECTIVE THAN
RENTING; AFTER YOU PAY DOWN YOUR
MORTGAGE, YOU OWN AN APARTMENT,
WHILE PAYING RENT LEAVES YOU WITH
NOTHING:
PAYING RENT IS A WASTE OF MONEY:
PAYING RENT IS A WASTE OF
MONEY:
renting allows me
to move easily
ownership is the only way
to secure a stable home
for my family
I can only decorate how
I want to in my own apartment
unable to buy
unwillingness to
take on a long-term
mortgage
attractive
offer
more attractive
location
improved
financial
liquidity ability to
relocate if
necessary
ownership increases my social
status
it improves my financial
liquidity
agree disagree
58,8% 66,1%
59,4%
61,5%
23,1%
11,5% 9,6% 9,6%
5,8%
58,8%
26,7%
47,2% 24,9%
PREFERRED FORM OF HABITATION
WHEN MOVING INTO
A FUTURE HOME:
ownership
don’t know
renting
58,6%
24,1%
17,3%
buying is more
cost-effective
than renting
renting is more
cost-effective than
buying
WHICH STATEMENT BETTER REFLECTS
YOUR BELIEFS
80,7%
19,3%
78,0%
10,9%
agree disagree
43,8%
29,8%
I’m protected from the risk of
falling real estate prices
38,8%
I can afford to live in a better
neighborhood
37,8%
KUPIĆ CZY WYNAJĄĆ? - WNIOSKI Z BADAŃ
PREFERRED CHOICE IF BUYING A PROPERTY OUTRIGHT IS NOT POSSIBLE:
use a mortgage to buy rent
52,6% 29,7%
Compiled
by
ThinkCo,
based
on:
A.
Czerniak,
M.
Rubaszek,
Preferencje
Polaków
dotyczące
struktury
własnościowej
mieszkań:
opis
wyników
ankiety
(Poles’
preferences
with
regard
to
the
structure
of
real
estate
ownership.
A
discussion
of
the
survey
results),
“Bank
i
Kredyt,”
48(2),
2017.

35
34
Outside Poland, renters constitute a
highly diverse group in terms of age: the
majority are likewise young people taking
their first steps towards independence,
but the group also includes families and
the elderly.34
These data are sourced from
the real estate market in Britain, where
the drive towards ownership parallels
that of Poland. This sheds light on the
potential future development of the Pol-
ish market, which may converge with
western trends as real estate prices rise
and the sector becomes increasingly pro-
fessionalized.
In the British real estate market, renters
fall into four main groups:35,36
Students: people under the age of 25
who spend 50% of their income on rent.
These individuals often rent rooms with
friends or sublet separate rooms. 64%
of them expect to still be renting in three
years, while 26% of them would pay
higher rent in exchange for access to
a living room equipped with high-tech
amenities (TV set, gaming console, ste-
reo, sound system, etc.).
Flexible workers: this group is much
broader than the Polish equivalent, and
includes people aged 25 to 44. The
majority of them (54%) rent as couples,
but nearly one third are single people.
Such renters typically choose smaller
renting: it’s not just for
young people
5 source: Unsplash
source:
Decoroom
units: studios, two-room apartments, or
co-habitate with others in larger prop-
erties (often houses). Their main reason
for renting is to save money for a down
payment on their own apartment. Among
this group, 21% would pay extra to
have a 24-hour reception area, and 48%
would pay for a fully furnished dwelling.
Families with children: aged 25 to 44,
this group rents small houses, preferably
with access to a small garden. Two thirds
of them are saving up to buy a property,
but the cost of renting represents a sig-
nificant expense in their budget, which
is why 53–60% of them plan to rent for
several more years. Families with chil-
dren would gladly pay extra for on-site
daycare, while 39% couples with older
kids mention the need for an en-suite
bathroom.
Mature renters: aged 45 and older, mem-
bers of this group consciously choose
rent as an alternative to owning their
own apartments. Asked for the reasons
behind their choice, they most frequently
respond that renting allows them to live
in a neighborhood in which they could
not afford to buy, and that paying rent is
more cost-effective for them than paying
a mortgage. These renters include cou-
ples, single people, divorced individuals,
and widows and widowers. Interestingly,
in contrast to the remaining groups, two
RENTERS IN THE UNITED KINGDOM BY AGE GROUP
10%
0%
2003 2008 2012 2017
60%
20%
70%
30%
80%
40%
50%
25-34
65+
55-64
35-44
45-54
16-24
thirds of them plan to continue renting for
several years in the future.
apartments tailored to
Renters’ needs
In Western European countries and the
United States, it is common practice to
tailor properties to the needs of ten-
ants, who whose demands change as
they have children, switch jobs, become
empty-nesters, and retire. Renting is
well-suited to this type of flexibility. As
renters grow older, they tend to pay more
attention to such factors as: being able to
live in an otherwise unaffordable neigh-
borhood, avoiding the responsibilities of
The British rental
market is used by
a full spectrum of
society. Poland
can also follow this
direction.
Compiled by ThinkCo, based on: Which?, Reform of the private rental sector: the consumer view, July 2018

37
36
Build-to-Rent in Poland | renting: it's not just for young people
home ownership, having the freedom to
downsize or upsize as their family needs
change, and having greater professional
flexibility. For this reason, in the countries
we use as comparisons for the Polish
rental sector, there is a market for senior
housing and special solutions tailored to
young families; many also have private
dorms.
Germany, Austria, and Switzerland, all
of which have a high share of rental
housing, are often presented as refer-
ence points. Each of them have different
sets of determinants associated with the
state’s housing, tax, and fiscal policies.
Germany presents an interesting exam-
ple, as it is quite common for apartment
owners (or shareholders in a property
trust) to be renters. Apartments are
meant to fulfill the renter’s current needs,
which is why some property owners rent
other, more suitable apartments.
According to a British study from 2017,
over 37% of renters describe their choice
to rent as a lifestyle rather than an eco-
nomic necessity preceding the future
purchase of a home.37
One in three ten-
ants rent because they’re saving up for
a down payment and the closing costs.
Subjects polled by the Freddie Mac, an
American organization chartered to back
home mortgages, points to renting as the
most affordable option. The major obsta-
cles to the purchase of real estate include
the lack of money for a down payment
(49% of renters) and insufficient income
to meet the monthly mortgage payment
(41% of respondents).38
WHAT ARE THE BENEFITS OF RENTING INSTEAD OF OWNING A PROPERTY?
MOST IMPORTANT FACTORS WHEN RENTING
Percent who agree that a service is “extremely important”
10%
0% 60%
20% 30%
59%
41%
40%
39%
24%
18%
17%
11%
5%
40% 50%
able to easily move if your
circumstances change
don’t need to make repairs
avoiding maintenance costs
makes it easier to relocate to take
advantage of new opportunities
being able to afford a nicer
property than if I had to buy it
delays having to make a decision
on where to settle down
możliwość inwestycji w coś
o lepszym zwrocie
able to invest savings
elsewhere for better return
other benefits
52% 46%
45%
38%
31%
24%
20%
17%
10%
7%
P
R
O
P
E
R
T
Y
C
ONDITIONS
Q
U
A
LITY OF LANDLO
R
D
V
A
L
U
E
F
O
R
M
O
NEY
LOCAT
I
O
N
PARKING
LOW MAI
N
T
E
N
A
N
C
E
STORAGE
S
P
A
C
E
GARDEN
C
O
M
M
U
N
A
L
SPACE
A
D
DITIONAL S
E
R
V
I
C
E
S
Compiled
by
ThinkCo,
based
on:
LSL,
PRSim,
Tenant
Survey
2018
Compiled
by
ThinkCo,
based
on:
Getliving,
Millennial
Living
2018:
Insights
for
the
UK
‘build
to
rent’
sector,
2018

41
40
Build-to-Rent in Poland | części wspólne i udogodnienia
tenancy
regulations
6 source: Maarten van den Heuve, Unsplash
source:
Unsplash
and tear of the washing machine, table,
or curtains, and tenants even expect the
landlord to replace any furniture or appli-
ance that wears out during their tenancy.
In fact, the concept of “normal wear and
tear” is understood by the public to en-
compass a very wide range of damage:
worn-out flooring and carpeting, scuffed
walls, damaged furniture, and applianc-
es broken beyond repair. These types
of damages are typically overlooked by
small landlords, who rarely demand that
their tenants perform the necessary
repairs. However, as landlords become
increasingly professional and the number
of properties under their management
rises, so does the volume of repairs, gen-
erating increasingly noticeable costs.
The greatest problem, in the case of pri-
vately rented housing, is that tenants of-
ten perceive it as a service in which they
are permitted to report issues at all hours
of the day—a washing machine cycle tak-
ing too long, or a faulty light switch in the
hallway, for example—and demand im-
mediate remediation. Replacing a gasket
or a light bulb, especially when it requires
the services of a professional repairman,
is treated as an investment in someone
else’s property, rather than simply the
replacement of a fixture subject to wear
and tear by the tenant himself. Landlords
who fail to respond to such reports are
viewed in a negative light.43
Renting an
apartment isn’t perceived as taking re-
sponsibility for a property and the minor
repairs it inevitably requires.
The expectations expressed by tenants in
contradiction of legal regulations point to
the need for comprehensive services that
would even include basic maintenance.
Institutional landlords have responded to
these needs by performing the requisite
repairs and maintenance, thereby keep-
ing the properties up to specific stan-
dards and guaranteeing the comfort of
their tenants.
ers.” No monitoring of the regulations’
effectiveness is conducted, and many of
those involved in the rental market lack
elementary knowledge. As a result, they
base their decisions on popular beliefs
and customs, many of which have no
legal basis.
responsibilities of
Landlords and Tenants
The range of responsibilities of tenants
are specified in both the Civil Code40
and
the Tenants’ Rights Act;41
these docu-
ments also contain provisions specifying
to the duties of both parties to a rental
agreement.42
The law requires landlords
to maintain all fixtures and fittings that
are installed in the building and supply
electricity, water, heating, etc. The tenant,
on the other hand, is obligated to refrain
from causing a nuisance and is required
to maintain the dwelling in proper condi-
tion. It is also the tenant’s duty to perform
most of the maintenance in the unit, such
as repairing doors and windows, main-
taining the floors, and painting the walls.
In practice, tenants are frequently aston-
ished when the landlord requests that
they paint the apartment after vacating it,
as this is commonly believed to be within
the purview of the landlord, as part of
his maintenance duties. Seldom does
a landlord charge tenants for the wear
In Poland, the renting of properties is
regulated by the Civil Code and the Act of
June 21, 2001, on tenants’ rights, munici-
pal housing stock and Civil Code amend-
ments39
(subsequently referred to as the
Tenants’ Rights Act or the Act).
Depending on the type of rental agree-
ment in question, it can be argued that
renters in Poland are exceptionally well
protected or that tenancy regulations are
rather lax. The specific differences be-
tween the different types of agreements
will be discussed later in this chapter.
This wide discrepancy is the result of the
sheer complexity of the regulations. The
Tenants’ Rights Act contains both Article
19, which is unfavorable to landlords,
and regulations pertaining to institu-
tional and occasional renting, in which
tenants’ rights are significantly curtailed.
Furthermore, the legal protections cover
occupants, but overlook many groups
of tenants, particularly when the form
of habitation is associated with employ-
ment.
The resulting legal landscape is the
product of the absence of an integrated
housing policy and the consequence of
amendments prompted by specific situ-
ations; for example, amendments to the
Penal Code mandating punishments for
cutting off utilities were a response to the
activities of so-called “tenement clean-
Tenants expect
comprehensive
service.
Institutional
rental meets these
needs.

43
42
Build-to-Rent in Poland | części wspólne i udogodnienia
RIGHTS AND DUTIES OF THE PARTIES TO A RENTAL AGREEMENT,
AS STIPULATED BY THE TENANTS’ RIGHTS ACT
of tenants have caused damage to a rented
apartment at least once
tenant,
out of pocket
landlord costs split evenly insurer
Who paid for the repair?
27%
51,6% 17,6% 15,4% 7,7%
WHAT DO TENANTS FIND BOTHERSOME ABOUT THEIR LANDLORDS?
ignoring issues
when reported
failure to
disclose defects
excessive
restrictions
unannounced
visits
excessively
frequent visits
30% 27% 23% 22% 18%
Terminate the agreement if the
tenant fails to meet specific terms
and poses a nuisance to others
Sell a tenanted property;
the new owner assumes the
responsibilities of the previous
landlord.
Approve modifications proposed
by the tenant.
Maintain the supply of utilities
and keep these systems in
working order.
Keep the building in good
condition.
Perform or pay for the necessary
renovation.
The right to privacy and quiet
enjoyment
A safe and habitable dwelling
Approve planned renovation and
modifications.
Pay rent as agreed in the
contract.
Refrain from antisocial behavior
(e.g., abide by the noise curfew)
and be considerate of neighbors.
Maintain cleanliness and keep the
property in working order (minor
repairs).
When the tenancy ends, return
the dwelling to its prior condition
and compensate the landlord for
damaged furnishings.
LANDLORD
RIGHTS
DUTIES
LANDLORD
TENANT
TENANT
Compiled by ThinkCo, based on: SW Research, Ubezpieczenie dla lokatorów (Renter’s insurance), report based on a study
commissioned by Europa Ubezpiecznie, conducted in August 2019 on a group of 1,010 renters in cities with populations
over 100 thousand.
Compiled by ThinkCo, based on own data

45
44
types of rental
agreements
7 fixed term rental
agreement
The market-based rental sector almost
exclusively uses fixed term rental agree-
ments due to the limited risk they pose
to landlords and because they provide a
straightforward way to change rent pric-
es and terminate agreements. The most
common tenancy period is one year, with
the option of extending the agreement
for another year. This is confirmed by tax
return data and polls conducted among
student renters44
and landlords.45
On the one hand, the fixed rental term is
intended to protect the landlord: in case
of arrears or damage to the property, the
process of terminating the agreement
is fast-tracked, reducing the risk borne
by the owner of the apartment. On the
other hand, there is also less risk to the
tenant, who, in a year’s time, may find a
more suitable apartment or, in the event
of problems with the landlord, simply
vacate the dwelling after the term of the
agreement has expired. In the end, both
parties agree that a one-year agreement
is a good option for everyone involved.
This is supported by data from a study
conducted by REAS among members
of the Mieszkanicznik Association;46
the
majority of one-year agreements are ex-
tended, and the average period of tenan-
cy is three years.
There are currently nine types of rental
agreements to choose from. The ones
most commonly used by landlords, and
the ones outlined in the Tenants’ Rights
Act, are:
1. indefinite term rental agreement
2. fixed term rental agreement
3. occasional rental agreement
4. institutional rental agreement
indefinite term rental
agreement
Indefinite term rental agreements are
standard in public housing. Only in the
case of tenancy agreements in social
housing, where tenants receive the
greatest amount of support from the
commune, are fixed terms common.
Public housing is believed to be secure
and stable, but in the absence of any
means-testing for existing tenants, this
type of housing does not serve people in
greatest need of assistance. Tenancy for
an indefinite period strongly restricts the
landlord’s ability to change the price of
rent and the tenant’s freedom to termi-
nate the agreement. Until recently, rental
agreements for properties in the munici-
pal housing stock could be inherited. Be-
cause of the significant restrictions facing
landlords with this type of agreement,
there is very little tenant turnover in the
municipal housing stock.
source:
Maria
Ziegler,
Unsplash
occasional rental
agreement
In the case of an occasional agreement,
the tenant is required to affirm, before the
apartment is handed over, that he has a
place to live, and must produce a notarial
deed in which he pledges to cover all
costs arising from the rental agreement
(including the cost of eviction, if it occurs)
and to surrender the apartment after the
tenancy ends. This form of agreement
limits the court procedure for reclaiming
the property to around two weeks, and
because the tenant previously specified
another domicile, he is not being evicted
onto the street.
DURATION OF AGREEMENT VS. ACTUAL TENANCY
less than 1 year 1 year 1–2 years 2–6 years over 6 years /
unspecified term
0%
20%
40%
60%
maximum length
of tenancy
duration of tenancy specified in
agreements
Depending on
the type of rental
agreement in
question, it can
be argued that
renters in Poland
are exceptionally
well protected
or that tenancy
regulations are
rather lax.
Compiled
by
ThinkCo,
based
on:
REAS,
Stowarzyszenie
Mieszkanicznik,
Najem
mieszkań
w
Polsce.
Właściciele
indywidualni
–
umowy
i
najemcy
(Apartment
renting
in
Poland.
Private
owners—agreements
and
tenants),
2018.
source: Ketut Subiyanto, Pexels

46
In practice, entering into an occasional
agreement is a complicated and drawn-
out process. The agreement itself is very
flexible and resembles commercial rental
agreements; it contains many details
that need to be specified. However, this
agreement is intended for non-profes-
sional landlords. Once the agreement
itself is signed, tenants need to meet
with a notary to draw up the appropriate
statement in the form of a notarial deed.
This also necessitates the involvement of
the actual owners of the other apartment,
who must grant permission for their
dwelling to be listed as a potential loca-
tion to which the tenant would be able
to move in the event of an eviction. And
it is not enough to draw up and sign the
necessary documents and hand over the
keys: for an occasional rental agreement
to be valid, the landlord must register it
with the tax office. Still, there are instanc-
es in which these security measures may
be insufficient; in the event that the alter-
native apartment specified by the tenant
in the agreement changes owners, the
tenant cannot be evicted onto the street,
making the complete enforcement of the
agreement impossible.
Navigating the great number of proce-
dures involved in this contract requires
legal knowledge and can be intimidating
to landlords and tenants alike, and there-
fore its use as a rental agreement remains
rare.
institutional rental
agreement
In an attempt to address the difficulties
tenants had with providing an alterna-
tive address in case of eviction, another
type of rental agreement was introduced:
institutional rental. This is a rather new
form that has not yet been tested in a
variety of life circumstances. There is also
an absence of court rulings, which will
prove crucial here, as evidenced by the
case of occasional rental agreements, in
which many loopholes have been found.
According to the relevant legislation, in
order to enter into an institutional rental
agreement, the owner must operate a
property rental business. This is a written
agreement for a fixed period and, unlike
an occasional rental agreement, it con-
tains no restrictions on the duration of
Tenancy: Indefinite term Fixed term Occasional Institutional
Form of
agreement
Verbal agreements are
considered to be entered
into for an indefinite
period; written agreements
also permitted
Written form
recommended,
as it specifies
the term of the
tenancy
Written only
Duration of
tenancy
Unspecified
From 1 month
to several years;
after 10 years,
it becomes an
indefinite period
tenancy
Fixed, up to 10 years
Określony, bez
ograniczeń
Additional
documents
Not required; property
handover reports are
voluntary
Not required;
property handover
reports are
voluntary
Yes, two mandatory
documents:
• notarial deed of
voluntary submission to
enforcement
• document specifying the
dwelling to which the
tenant will move in case
of eviction
Optionally: permission from
the owner of the specified
dwelling (if it does not
belong to the tenant)
Mandatory:
– deed of
voluntary
submission to
enforcement
Registration of
tenancy
None None
Must by registered with the
tax office within 14 days of
the effective date; written
confirmation of registration is
required
None
Permitted
landlords
No restrictions No restrictions
Natural persons, companies
not involved in renting
Professional
companies
operating under
PKD code
68.20.Z
Permitted
tenants
No restrictions No restrictions
Only natural persons renting the property for
personal residential use
Grounds for
termination by
landlord:
Lack of payment, damage,
health and safety violations,
use in violation of
agreement, arrears of three
payment periods (3 months
are standard), after notice is
served; parties may include
other terms in agreement
Lack of payment, damage, health and safety violations, use in
violation of agreement, arrears of three payment periods (3 months
are standard), after notice is served; parties may include other terms
in agreement
source:
LivUp,
Aurec
Capital
Poland

49
48
tenancy. Furthermore, the landlord may
list, in the contract or its appendices, the
terms and conditions binding the tenants.
A key element of this agreement is the
appended notarial deed in which the
tenant agrees to vacate the premises
once the tenancy period expires and vol-
untarily submit to the enforcement of any
costs arising therefrom. The agreement
itself should also contain a clause stating
that the tenant understands that in the
event he is required to vacate the apart-
ment, he will not be entitled to social or
temporary housing. The main difference
between occasional and institutional
renting is that in the latter the tenant
is not required to specify an alternative
dwelling. In consequence, if the tenant
refuses to vacate the property after the
expiration (or termination) of the agree-
ment, the process to begin eviction is
significantly shortened.
Up until recently, this issue posed the
greatest obstacle to the development of
the institutional rental market, where the
uncertainty caused by the prospect of a
protracted court case and the inability to
reclaim an apartment were of particular
concert to landlords. Today, while there
are still questions regarding the develop-
ment of judicial standards, enforcing the
surrender of property in the same good
condition at the end of a tenancy, and
methods of eviction, institutional rental
agreements provide an additional tool
enabling the professionalization of the
rental market in Poland.
TYPES OF RENTAL AGREEMENTS SIGNED WITH TENANTS
(MULTIPLE CHOICE)
regular
agreement
occasional
agreement
institutional
agreement
short-term
agreement
no tenant verbal
agreement other
(e.g. loan)
75%
13%
4%
4%
2% 2%
1%
Depending on
the type of rental
agreement in
question, it can
be argued that
renters in Poland
are exceptionally
well protected
or that tenancy
regulations are
rather lax.
source:
Unsplash
Compiled
by
ThinkCo,
based
on:
REAS,
Stowarzyszenie
Mieszkanicznik,
Najem
mieszkań
w
Polsce.
Właściciele
indywidualni
–
umowy
i
najemcy
(Apartment
renting
in
Poland.
Private
owners—agreements
and
tenants),2018.

50
institutional
rental market

53
52
build to rent
8
Institutional renting can be defined as
part of the renting sector in which the
landlord must be an entity involved in
property rental as a commercial activity.
In practice, this means that institutional
renting is the domain of mutual funds
owning Build to Rent (BTR) properties
and companies whose core business is
managing these types of buildings.
While this definition has a basis in law, it
fails to illustrate the significance of insti-
tutional renting in the real estate market.
Because of the large scale of the Build to
Rent sector in the United Kingdom, the
British have already devised the neces-
sary definitions.47
foundations of
institutional renting
The fundamental difference between the
institutional and individual rental market
is the professional service provided by
the landlord, from the apartment search
stage, through the move-in and tenancy,
to the end of the lease.
One might say that the three foundations
of institutional rental are management,
property, and design. The investment
should formally belong to a single insti-
tution and be managed by a professional
management company. The operator’s
role is to provide optimal conditions for
renting and to respond to the needs of its
users by adapting the range of amenities
it offers. Of no less importance, however,
is the third pillar, namely, high-quality
architecture and the meticulous planning
of the building’s functional aspects.
From the very start of the investment,
the entire process is carried out with the
future tenants in mind. The entire time-
line—including the dates on which the
building is put into commission and is
opened to tenants—is known from the
beginning, as this required by the oper-
ator’s business model. The design stage
involves analyzing the market demand for
particular types and sizes of rental apart-
ments, and once ground is broken on the
property, a messaging strategy is devised
to reach the desired audience.
special architecture
Build to Rent properties should offer sev-
eral distinct types of apartments, allow-
ing potential tenants to choose the unit
that’s right for them. The option of mov-
ing into a larger or smaller unit (within
the same building or housing complex) is
perceived as a benefit. Equally important
is the layout of the building: its supple-
mentary amenities and access to com-
mon areas, which provided added value
and distinguish Build to Rent from build
to sell properties.
Housing offered on the institutional rental
market is expected to be adaptable in
form and neutral in character, giving ten-
ants sufficient leeway to personalize the
unit. This issue is a crucial factor for very
many renters in developed rental markets
as well as in Poland, where one would be
hard-pressed to rent an apartment that
bears no traces of the previous tenant’s
tastes.48
This also requires the institutional inves-
tor to bear the costs of maintaining the
building as it ages. It is therefore easier
to budget in higher-quality materials
and more durable fit-outs that are better
suited to the way rental housing is used.
The initial expense is recouped in the
long term through lower maintenance
costs, which also increases the building’s
market value. Higher-quality finishing
is also appreciated by tenants, making
them more likely to opt for Build to Rent
housing.
The proper preparation of an investment
also makes the future management of the
property easier. A well-planned project
encourages free interaction among ten-
ants, increasing their satisfaction with
their housing. Access control is crucial in
ensuring security and the proper use of
amenities, particularly when it comes to
utility rooms and spaces (laundry rooms,
bike rooms). Providing digital commu-
nication channels between tenants and
the manager streamlines the process of
reporting issues, requesting repairs, and
paying rent, and can also boost the image
of rental housing and the institution itself.
property management
Tenants who live in a Build to Rent build-
ing should be guaranteed professional
service that prioritizes customer satisfac-
tion. With a dedicated team of managers
that can quickly respond to day-to-day
issues and malfunctions, renters rate Built
to Rent housing much higher than renting
from individual landlords. This also allows
the operator to maintain high standards
DEFINICJE
source:
Inspirentals,
Golub
GetHouse
Build to Rent
A real estate investment
comprising at least 50
self-contained residential
units in a building designed
and constructed to meet the
particular housing needs of
renters.
The building remains under
unified ownership and the
unified management of a
single professional com-
pany.
The number of amenities
should be tailored to the
size of the investment and
local conditions.
The property manager is
required to possess the
necessary qualifications and
be a member of a recogni-
zed professional body.
The building must be held
as Build to Rent under a
covenant for at least 15
years.
Tenancies of several years
should be offered, with the
terms of in-tenancy rent
reviews specified in the
agreement.
.
source: Unsplash

55
Build-to-Rent in Poland | build to rent
and quality of service, contributing to
the long-term value of the brand. This
requires a carefully planned process and
a single operator who is responsible for
everything, from marketing and renting
out apartments to maintenance and reg-
ular communication with tenants.
All of these factors save the potential
tenant effort both while looking for an
apartment and while living at the prop-
erty. Having the option of contacting
a professional manager helps resolve
doubts and elevates the renting process
to a more professional level. Much of the
paperwork can be taken care of remotely
before the tenant rents the apartment;
the rental agreements are standardized,
and there clear procedures in place. For
many people, this constitutes a signifi-
cant increase in quality.
Proper community management helps
tenants meet other residents and fosters
a sense of belonging. This in turn trans-
lates into greater loyalty among tenants,
who often decided to remain in the same
unit for longer periods, and when they
eventually move out, choose a different
apartment in the same building or loca-
tions managed by the same operator.
The manner in which the institution com-
municates with its tenants is also import-
ant. Residents appreciate having a single
point of contact, that is, a resident ser-
vices office or even a mobile application
that enables them to keep track of their
payments and utility usage, report issues,
request repairs, and reserve additional
services. Much like in the commercial real
estate sectors, responding correctly to
the needs of renters in the Build to Rent
sector is a crucial factor contributing to
the final perception of the product and its
commercial success, often much more so
than competitive pricing.
security of tenure
Security of tenure can be considered the
foundation of the customer value offered
by the build to rent sector. Apartments in
a Build to Rent building are only intend-
ed fto be rented. This sends residents a
clear signal that as long as they pay their
rent, no one will end their agreement for
personal reasons, because continuously
renting out units is the sole purpose of
this business. The tenancy periods of-
fered are intended to foster this sense
of security: longer leases mean greater
certainty about tomorrow and more
predictable expenses. This predictability
provides an enormous sense of security
that cannot be guaranteed by individual
landlords.
The rental agreements clearly specify
which furnishings are covered by the se-
curity deposit and how the wear and tear
of the unit will be quantified. On day one,
renters are often given not just the rental
price stated in the agreement, but also
notice of future rent increased indexed
to inflation. In contrast to housing stock
managed by cooperatives and tenants’
associations, utilities are billed on short
cycles (typically on a monthly basis). Res-
idents receive an invoice shortly after the
meters are read, making it easier to keep
track of utility expenses. In some build to
TENANT PRIORITIES
AFFORDABILITY
QUALITY
CONVENIENCE
CUSTOMER
SERVICE
PLACE AND
COMMUNITY
FLEXIBILITY AND
CERTAINTY OF
TENURE
flexible lease terms
reasonableness in dealing with deposits
and rental increases
predictable rent increase
on-site concierge and responsive maintenance team
“plug & play” utilities
rent and all-inclusive bills paid through a single online portal
convenience offerings such as dry cleaning
and apartment cleaning
building design and fit-out specifically tailored
for build to rent
communal and internal parts of property maintained
consistent levels of quality
regular maintenance to a high standard
professional and incentivized staff
guaranteed levels of service
transparency
interaction fostered between neighbors through
facilitated events and forums
living in a build to rent building opens the opportunity for
existing friend networks to move into the same building
enhanced feeling of security through concierge and sense of
community
extended lease terms (i.e. 3 years) with tenant breaks
potential to upsize/downsize to meet evolving lifestyle
certainty that the proerty will remain a rented property
Compiled
by
ThinkCo,
based
on:
LSL,
PRSim,
Tenant
Survey
2018
Three foundations
of the institutional
rental are
management,
property, and
design.
31%
High speed Internet
15%
Balcony
29%
Parking
10%
Parcel collection
32%
Pets allowed
17%
House cleaning
services
27%
Garden
22%
Satellite TV
6%
Bike storage
5%
Onsite
management
FACILITIES THAT TENANTS WILL PAY MORE FOR
Compiled
by
ThinkCo,
based
on:
ULI,
PRS
Best
Practice
Guide,
2017

57
56
rent investments, a lump-sum payment is
charged for certain utilities as part of the
monthly rent.
Periodic technical inspections of rental
properties are conducted by profes-
sionals, avoiding the awkwardness and
discomfort of having a landlord drop by
for a semi-personal house call. Because a
sense of stability and security is central to
the tenant’s satisfaction,49
Build to Rent
housing is designed to guarantee resi-
dents their privacy and allow them to feel
at home.
included amenities
Build to Rent buildings typically offer a
range of amenities included in the rent.
The selection varies depending on the
grade of the investment, the target group,
and the base rent. The service most fre-
quently expected by residents is effective
property management, mentioned by no
fewer than 73% of respondents. Other
highly rated amenities include parking
places and storage spaces (listed by 56%
and 28% of subjects, respectively).50
In-
cluding the cost of utilities, Internet, TV,
and renter’s insurance in the rent is also
considered a benefit by tenants.
FACTORS NEGATIVELY AFFECTING RENTER SATISFACTION IN POLAND
Excessive restrictions on
interior decoration 56,8%
Lack of protection against rent
increases 56,2%
Landlord inspections too
frequent
53,3%
Poor selection of rental
apartments 46,8%
Insufficient protection against
eviction 56,7%
Rent is too high (relative to the
cost of a mortgage payment) 53,9%
Lack of institutional landlords
45,2%
Renters highly value access to communal
areas (large kitchen or a garden open to
residents), work hubs, on-site laundry
and drying rooms. When asked which
amenities they would be willing to pay
extra for, renters most frequently listed
being allowed to have pets (32%), high
speed Internet (31%), parking (29%),
and garden access (27%).51
Other val-
ue-increasing facilities include clean-
ing services (17%), balconies, on-site
dropboxes, parcel collection, and bike
storage. A reception desk or doorman is
also a major asset that improves securi-
ty, serves as a point of first contact, and
can sign for a package when necessary.
Regardless of whether a resident takes
regular advantage of these amenities or
is merely aware of their availability, they
still encourage a strong sense of comfort
in tenants—a feeling for which they are
prepared to pay extra.
It is also natural for the buildings to set
aside ground-level units for commercial
use, such as restaurants, grocery stores,
beauty services, and others. The close,
convenient location of these businesses is
a value in itself, and the leases for these
commercial spaces can include resident
discounts for meals, drinks, and services,
which become another added value in the
eyes of the tenants.
Institutional renting isn’t just about having a place to
live, it’s about living among people we know and who
make us feel safe.
That’s why we’re rolling out LivUp Community, a servi-
ce designed to foster communities among residents
in all our properties. There is a visible growing need in
the renting sector for additional services and facilities
that would encourage interaction between residents.
With that in mind, we’re offering something more than
just professional housing rental services: we’re creating
the opportunity for new friendships, the exchange of
experiences, meeting new people, and taking part in
community events.
We’re launching a range of new amenities in our
properties, including communal lounges, free events
for residents, and a management app, with the goal
of creating a stronger, more tightly knit community of
residents. We at LivUp place a strong emphasis on
good communication between tenants and landlords,
and among tenants themselves, as well. Our priority is
to continue improving our quality of service manage-
ment process, an indispensable tool for building lasting
relationships with our residents.
Roee Shamir
LivUp
Compiled
by
ThinkCo,
based
on:
A.
Czerniak,
M.
Rubaszek,
“Znaczenie
prywatnego
rynku
najmu
nieruchomości
dla
stabilności
makroekonomicznej
krajów
strefy
euro”
(The
significance
of
the
private
rental
sector
for
the
macroeconomical
stability
of
Eurozone
countries),
NBP,
2016

59
58
Everywhere a private rented sector has
developed, entire buildings and apart-
ment complexes have also been built
for rental purposes. The same is true of
Poland, where the first Build to Rent proj-
ects began several years ago, before the
existence of favorable conditions for the
development of the sector. Investors typ-
ically seek out finished projects to invest
In Poland, however, finding a sufficiently
high standard investment in an attractive
location was, until recently, a challenging
taste. Residential real estate developers
showed little interest in selling entire
buildings.
But by the turn of the decade, the mar-
ket dynamics were starting to shift. The
return on investment in the residential
market was so attractive that capital mar-
kets responded quicker than could have
previously been expected. Despite the
absence of convenient financial instru-
ments to diversify real estate investments
in Poland (REITs, discussed below), many
mutual funds express interest in purchas-
ing entire investments in Poland’s largest
cities.
The first herald of the significant shifts
under way in the residential market came
when mutual funds began investing in
alternative residential properties. The
announcement and construction of pri-
vate dorms and other co-living properties
showed large investors just how great
their profits could be. More and more,
questions about REITs and Build to Rent
investments—from individual properties
to entire apartment complexes—were
being raised. Then came the revolution of
2019.
The buzz around the private rented sec-
tor grew significantly in the real estate
market and media after Golub GetHouse
sold a planned apartment high rise in
Warsaw’s Wola neighborhood.52
The
news of a forward purchase deal for a
Build to Rent property was seen as a
true milestone by those in the real es-
tate market who had previously claimed
that there was no place for Build to
Rent investments in Poland. Soon after,
the country was swept by news of the
acquisition of the residential real estate
company Vantage Development by TAG
Immobilien, one of the largest real estate
investment funds in Germany,53
prompt-
ing industry media to proclaim 2020 the
year of renting.
The first institutional investor to
invest in this sector in Poland was the
state-owned FMnW (Fundusz Mieszkań
na Wynajem, or Housing Rental Fund).
In 2015 the fund purchased finished
multi-family buildings to rent, and then
proceeded to contract and design further
investments. Today FMnW is the largest
actor on the market, with nearly 2,000
units under its management in Warsaw,
Krakow, Wrocław, Gdańsk, Poznań, Łódź,
and Katowice.
The German fund Catella followed
in FMnW’s footsteps, purchasing 72
finished luxury apartments in the Złota
44 building, shortly before acquiring the
Build to Rent property Pereca 11 (193
units) and three buildings still under con-
institutional renting
in Poland
9
source:
LivUp,
Aurec
Capital
Poland
source: Unsplash
Compiled
by
ThinkCo,
based
on
own
data
PLANNED AND COMPLETED PRS INVESTMENTS
zapowiedzi inwestycyjne
spółek najmu
instytcjonalnego (do 2025)
szacowany zasób
najmu instytucjonalnego
do 2025 roku
lokale w budowie
i planowane (do 2023)
lokale istniejące
25 865
37 100
7 362
3 873

61
60
Build-to-Rent in Poland | institutional renting in Poland
struction on Rakowicka Street in Krakow
(152 luxury apartments and 139 student
flats). Catella plans to build a portfolio of
2,000 Build to Rent units.
The government-run program Miesz-
kanie dla Rozwoju (Housing for Growth,
formerly Mieszkanie Plus), pledged to
build 50 thousand Build to Rent apart-
ments. 1,017 units have been construct-
ed in the three years since the program
was launched. Architectural design stu-
dios selected through seven competitions
have been tasked with designing 6,300
apartments.
The brand Resi4Rent intends to
build a portfolio of 7,500 units by 2023.
The company’s four existing investments
comprise over 1,200 apartments. Four
more properties are currently under
construction in Warsaw, Gdańsk, and
Poznań, with a total of over 1,060 units
Through the brand Inspirentals,
Golub GetHouse is planning to create a
portfolio of over 3,000 PRS apartments
within the next three to five years. War-
saw’s Liberty Tower will be home to 500
luxury apartments, while another proper-
ty on Postępu Street with have a planned
371 units.
The LRC Group wants to build a
portfolio of 1,900 apartments in prime
locations in Warsaw and at least as many
throughout the country. The investor
made a forward purchase agreement
with Golub GetHouse for a Build to Rent
building with 900 luxury apartments,
and is currently working with Decoroom
to finish 390 units in the existing Pacific
Residence on Solec Street in Warsaw.
Rental agreements in the latter property
are already being signed.
Over the next 3–5 years, Vantage
Development plans to build 8–10 thou-
sand Build to Rent apartments in various
cities around the country. The company
was prompted to pursue this avenue of
development after it was acquired by
TAG Immobilien for 85 million euros.
The developer’s previous operations had
mostly been centered around Wrocław.
The company’s current management is
carrying out a plan to expand into other
local markets, including Poznań and Łódź,
where it has already secured properties
with the view to offer rental apartments
Zeitgeist Asset Management from
the Czech Republic intends to build a
portfolio of 800 units in Poland. It has so
far secured three properties for this pur-
pose in Warsaw.
Cavatina intends to build a portfolio
of 5,000 rental apartments by 2025. It
has already broken ground on its first
investments in Katowice, Łódź, and
Wrocław, which will comprise over 1,400
units. The developer is betting on the
development of the mixed-use model
within the PRS.
In a conditional preliminary agree-
ment signed January 2020, Murapol
agreed sell 98% of its shares to AEREF V
PL Investment. This is of enormous sig-
nificance, because Murapol had also been
determined to create its own portfolio of
4,000–5,000 Build to Rent apartments.
April 2020 brought more important
news for the private rented sector. Aurec
Capital Poland purchased a 200-unit
Build to Rent property at 186 Puławska
Street for over 100 million PLN. The fund
owns two additional investments in War-
saw’s Praga neighborhood, where over
250 apartments in the works. Its future
plans included over 2,000 Build to Rent
units.
In June Eiffage Immobilier Poland
announced plans to construct a 453-unit
rental apartment complex in Mokotów,
Warsaw. It is slated for completion in ear-
ly 2023. Outside Warsaw, the company
is planning additional investments span-
ning 2,300 rental apartments in Krakow,
Wrocław, Poznań, and Gdańsk.
current data
As of late June 2020, over 3,700 residen-
tial units have been delivered in Build to
Rent buildings. The currently approved
designs will add another 7,000 apart-
ments to this number. These data only
include investments that have already
been announced; it is impossible to es-
Currently, there
are 3,873 premises
for institutional
rental in Poland.
By the end of
2023, there will be
over 11,000.
U.S. REAL ESTATE MARKET: APARTMENT PRICES AND RENT PRICES
0%
1996 2000 2005 2010 2015 2019
20%
40%
60%
80%
100%
120%
140%
160%
apartment prices rent prices
Compiled
by
ThinkCo,
based
on
own
data
source:
Dan
Gold,
Unsplash

63
62
timate how many talks are underway
in Poland’s burgeoning institutional real
estate sector. Many of these companies
have mentioned the planned size of their
investments in their announcements, with
the cited volume of apartments running
in the thousands.
If current market trends remain steady,
and the plans announced by developers
and investment funds come to fruition,
we can expect not just the 11 thousand
that institutions are certain to deliver by
2025, but at least twice that number.
However, these estimates are still based
exclusively on data from active market
players. It should also be noted that even
the tens of thousand of units currently
expected to be completed in the next four
years are still insufficient to satisfy the
demand for rental dwellings in Poland
today.
In the upcoming years, Build to Rent in-
vestments will appear mainly in the Pol-
ish capital and large regional cities. We
can be certain that, in 2020, 1,147 units
will enter the housing stock in Wrocław,
along with 899 in Poznań, 745 in Kra-
kow, 838 in the Silesian metropolitan
area, 511 in Gdańsk, and 5,190 Build to
Rent apartments in Warsaw.
COVID-19 and the
prospects of PRS
When in March 2020 the pandemic
brought a large portion of Poland’s econ-
omy to a halt, capital investors postponed
their decisions until the world reopened
for business. This decision was guided
more by pragmatism than doubts about
the financial viability of their operations.
With no certainty whether the delivery
dates on previous investments could be
maintained, investors were unwilling to
pursue new ones. At the same time, the
circumstances provided a perfect excuse
to renegotiate offer prices. One would be
forgiven for thinking that the coronavirus
would disrupt the burgeoning market
But doubts were dispelled when, in ear-
ly April, Aurec Capital announced the
purchase of a Build to Rent building in
Warsaw’s Mokotów neighborhood from
Matexi. This sent an official signal to the
market that private rental was not going
away and could set a positive example
against the backdrop of the negative pro-
cesses taking place in the trade and hotel
sectors. The next three weeks brought
more announcements that dispelled any
doubts about the institutional rental mar-
ket. The appearance of Covid-19 only
accelerated certain changes that were al-
ready occurring in the real estate market,
including the residential sector. In hind-
sight, this makes more and more sense.
The greatest growth in the United States’
rental sector occurred after 2008, in the
wake of the first great recession since
the Second World War. Increased income
volatility, less access to mortgages, mov-
ing in search of work—all of these factors
reduce the appeal of home ownership
and highlight the benefits of renting.
But Poland emerged from the global
recession practically unscathed, and gov-
ernment support for the residential real
estate market at the turn of the previous
decade actually boosted sales, generating
exponential growth in the property de-
velopment business. As we stand at the
precipice of another crisis, our chances
of emerging unharmed on the other end
are slim. We can expect labor flexibility
to increase, and with it the frequency of
relocation. There is little doubt that the
recession will strengthen the private rent-
al sector.
I strongly believe in the future of Poland’s private rental
sector, and I’m convinced that this is the avenue the
entire market will be pursuing in the coming years.
We will be paying particularly close attention to the
nascent institutional rental market. Today, in Warsaw
alone, there are over 100 thousand rental apart-
ments, but they belong to individual owners who have
invested their savings in one or several properties.
There is a dearth of investments designed from the
ground up to be rented out under professional mana-
gement. Our projects are intended to fill this gap.
We focus on constructing Build to Rent properties
with a wide range of facilities near Warsaw’s business
districts, where we believe they are most urgently ne-
eded. We want to give the people working in nearby
office buildings the option of renting apartments in
professionally managed properties. This model has
been successful in such countries as the U.S., U.K., and
Germany. Though it is still in its early stages in Poland,
I’m convinced that it will prove to be an effective an-
swer the changing demands of people who seek com-
fortable housing that suits their needs.
Jakub Bartos
Golub GetHouse
210 lokali
301 lokali
TRÓJMIASTO
1 651 lokali
4203 lokali
WARSZAWA
219 lokali
797 lokali
ŁÓDŹ
405 lokali
301 lokali
KRAKÓW
146 lokali
838 lokali
KATOWICE
816 lokali
444 lokali
WROCŁAW
421 lokali
478 lokali
POZNAŃ
INSTITUTIONAL RENTAL INVESTMENTS IN POLAND
lokale w budowie
i planowane (do 2023)
lokale istniejące
Compiled
by
ThinkCo,
based
on
own
data

65
64
The discussion on the introduction of
REITs into the Polish legal system has
gone on for years, and the topic has seen
resurgent interested in the wake of the
pandemic. A REIT, or Real Estate Invest-
ment Trust, is a fund that aggregates
capital from investors (natural and legal
persons) who want to invest in real es-
tate.
The first modern REIT was founded in the
U.S. in 1961. Today, various forms of RE-
ITs operate in more than 30 jurisdictions.
The first REIT bill was written in 2016,
and three subsequent drafts have been
debated since then. So far, to no avail.
The last draft, submitted in September
2018, would codify FINNs,or companies
investing in rental properties (firmy in-
westujące w najem nieruchomości) in
Polish law.54
Legislative work in the lower
house of parliament has dragged on for
nearly two years, with no act passed to
this date. Due to the changes in the le-
gal and business environment that have
occurred in the meantime, it is possible
that another, fourth, bill on Polish REITs
(FINNs) will have to be drafted.
The current draft defines FINNs as com-
panies whose primary activity is investing
in and renting out residential properties in
Poland. Most controversially, the bill spe-
cifically limits FINNs to investing in prop-
erties intended for residential purposes,
tempering the enthusiasm of many actors
on the real estate market. Though the bill
does define dormitories and properties
that provide continuous care to people
with disabilities as residential properties,
if FINNs are to be a genuinely effective
instrument in Poland, any limitations on
their use would have to apply to the le-
gal status of the property, rather than its
purpose.
In legal terms, FINNs will be Polish joint-
stock companies listed on the stock
market. Interestingly, FINNs may have
subsidiaries, but the bill does not allow
limited partnerships, despite their suc-
cessful track record on the market. FINNs
are obligated to maintain the value of
their real estate assets at no lower than
80% of their carrying value, and earn no
less than 90% of their revenue from the
rental or sale of residential properties.
They are also required to generate reve-
nue from at least five properties.
To encourage investors, the profits
earned by FINNs and their subsidiaries
will be taxed at preferential rates. To take
advantage of these special terms, compa-
nies will have to fulfill a number of specif-
ic conditions.
According to the bill, income generated
by FINNs and their subsidiaries from
• renting residential properties,
• the sale of residential properties,
• the sale of subsidiaries’ shares/stocks
(only FINNs),
• and the dividends/profits of subsid-
iaries (only FINNs)
will be temporarily exempt from taxes
until it is issued as dividends to investors
(or, in the case of subsidiaries, until it is
used to purchase residential properties,
but no longer than 24 months).
At the same time, the draft bill would
obligate FINNs and their subsidiaries to
distribute specific percentage of their
profits, less mortgage payments, perpet-
ual usufruct fees, and the cost of residen-
tial property improvements.
Income earned by FINNs from the rental
of properties (directly or through sub-
sidiaries) will be subject to an 8.5% CIT,
paid by the FINN. However, in practice,
due to the fact that FINNs would not be
permitted to amortize their properties,
the actual tax rate would be closer to the
nominal CIT rate, which the Ministry of
Finance in fact mentions in its explana-
tory memorandum to the bill. In order to
take advantage of these preferential tax-
ation rates, FINNs would have to conduct
more extensive accounting.
Dividends issued by FINNs to their in-
vestors would be CIT/PIT-exempt. The
disposal of FINN shares, on the other
hand, would be taxed under general
principles. FINNs and their subsidiaries
would not be subject to the minimum tax
on buildings that are the subject of rental
agreements, leases, or other contracts of
a similar nature.
źródło:
Freepik
THIS CHAPTER WAS
WRITTEN
IN COOPERATION
source:
Christian
Hume,
Unsplash
To encourage
investors, the
profits earned
by FINNs and
their subsidiaries
will be taxed at
preferential rates.

67
66
Although Build-to-Rent apartments may
not, at first glance, appear much different
from built-for-sale homes, even a cursory
analysis reveals significant differences
between the two sectors that affect the
costs and dynamics of construction, as
well how the properties are finished and
operated.
The two key factors that determine all
subsequent aspects are the quality of the
architecture and construction, and the
business models used to fill the units. In
the case of Build-to-Rent buildings, the
price of the property plays a major role in
the negotiations between the developer
and the investor (institution). However, it
is equally important that the investment
respond to the changing expectations of
tenants. Rental apartments are long-term
investments that are spread out over a
period of time. If the quality of the apart-
ments and the finish of the stairwells is
not up to appropriate standards, or if the
property’s surroundings are unappeal-
ing, its business performance will suffer,
negatively affecting its later appraisal
and sales prospects. Therefore, because
of the different business model used in
Build-to-Rent properties, they must be
constructed from more durable materials
and require more careful planning in or-
der to effectively meet the practical and
functional needs of the tenants.
design
Build-to-Rent properties are distin-
guished by the more carefully thought-
out layout of their units, as these are rent-
ed not based on the price of the square
meter of floor area, but based on the
function of the apartment. The number of
rooms and their adaptability are crucial.
Apartments in Build-to-Rent buildings
are often much brighter, which has a pos-
itive effect on rent prices. Brighter units
are easier to rent out, and large windows
make the apartment look larger, making
it possible to charge the same rent for a
smaller area.
Because no buyer modifications need to
be carried out, the entire process of con-
structing a Build-to-Rent property can
be conducted using BIM (Building Infor-
mation Modeling) technology, shortening
completion times and reducing costs to
the bare minimum. It also enables devel-
opers to make more effective use of pre-
fabricated components, further accelerat-
ing the construction process and allowing
tenants to move in sooner. The analysis
of functional layouts takes place at the
design stage and can be conducted by
a professional residential interior design
company while the building is still under
construction, shortening vacancy periods.
This also makes it possible to estimate
the finishing costs early in the investment
process and accommodate them in the
financial model.
apartment layout
and fit-out
BTR building designs frequently offer
fitted apartments complete with finished
floors, walls, and bathroom fixtures, along
with fully furnished and equipped kit-
chens. It is necessary to thoroughly plan,
at the early stage of the design process,
the functions of each room, including the
placement of electrical outlets, switches,
and lighting. This contrasts sharply with
so-called shell-and-core apartments,
which purchasers are expected to com-
pletely fit-out on their own. Unlike in the
case of homes sold on the retail market,
the quality of the fittings used plays a si-
gnificant role. The use of cheaper fittings
can spell real per-unit savings, but it af-
fects the cost of maintenance and repairs,
which can become severe in the case of a
Built-to-rent property.
It has become common practice in Poland
for apartments to be rented out fully fur-
nished. Therefore, following the example
of Western practices, it is recommended
to offer at least partially furnished units
or hybrid solutions: lower asking rent,
with the option of renting additional fur-
niture as a service. The furniture catalog
can be compiled by the same design
studio tasked with fitting out the units
in the property. Apartments can then be
tailored to a specific type of tenant, in
accordance with the expectations of the
institutions commissioning the building.
A cohesive fit-out of the units and com-
mon areas will guarantee a consistent
look across all the rooms in the building.
This approach allows for more flexible
adaptation to the needs of tenants, who
may require fewer furnishings or already
own the furniture that suits them best.
operation
Build-to-Rent buildings are designed
to be timeless and age slowly, as these
factors affect the property’s value in the
future. The finishing materials used are of
new standards
in build-to-rent housing
10
source:
Lorenzo
Cafaro,
Pixabay
source: Pierre Chatel-Innocenti, Unsplash
Built-to-Rent
properties need
to be designed
as more durable,
both in terms of
structure and
esthetics.

Built-to-Rent in Poland

Recomendados

Recomendados

Más contenido relacionado

La actualidad más candente

La actualidad más candente (20)

Similar a Built-to-Rent in Poland

Similar a Built-to-Rent in Poland (20)

Más de ThinkCo

Más de ThinkCo (8)

Último

Último (20)

Built-to-Rent in Poland