Warsaw's growing role as a financial and business hub is showing in its central business district, where cranes are a regular feature of the skyline and ambitious building projects are going ahead.
Poland's capital – the largest and most liquid office market in central Europe – is at the heart of the region's commercial property market.
The area dominates by the size of the office market, rents, ease of financing, projects under development and investor interest. "The further you are from Warsaw, the more difficult it is," says Tomasz Trzoslo, the head of the Polish office of Jones Lang LaSalle, the property consultancy.
He adds that investments in central Warsaw usually attract interest from 20-30 funds, those in suburban Warsaw pull in 10-15 funds, while those in secondary Polish cities and other central and eastern European capitals attract five-10 funds. Southeastern Europe and the Balkans are much further off investors' radar, often attracting only two or three investors, mostly small funds specialising in riskier frontier markets.
Warsaw is the largest office market in the Central and Eastern Europe (CEE), with almost four million square metres of existing office space, about a quarter of the stock for the whole region. Last year, 267,000 square metres of office space was completed, about half of the region's completions. Warsaw is the only capital in the area where office projects have not been postponed and it has experienced the largest increase in new projects.
The region's largest investment deals were based in Warsaw, including last year's €210m sale of the Warsaw Financial Centre to Allianz Real Estate and Tristan Capital Partners, and the sale of Warsaw's International Business Centre for €148m to German property manager Deka.
The market is being driven by the city's growing role as the region's financial and business hub.
In the early 1990s, the first years of post-communist transformation, Poland was a hyperinflationary mess. Many foreign companies set up bases in Prague and Budapest, attractive cities that had survived the Second World War relatively unscathed. Warsaw was, and is, not so appealing.
Poland's size – at 38 million people it accounts for about half the CEE – and especially its economic performance have changed calculations. Poland is the only European economy not to have suffered a recession in more than two decades. The economy has continued to power ahead after the start of the economic crisis – it has grown by 18.7 per cent during 2008-12. Slovakia is the next best performer, with growth over that period of 10.2 per cent. The European Union as a whole saw a slight contraction.
Warsaw is one of the few CEE cities where cranes are working on projects such as the 160-metre-tall Cosmopolitan tower, a mixed retail, office and residential project.
Its size and the liquidity of its market makes it increasingly attractive for investors. CB Richard Ellis Ltd., the property consultancy, says Warsaw now ranks fifth among European cities as a target for investors, behind London, Munich, Berlin and Paris.
"Poland is no longer thrown into the same bucket as the Czech Republic, Hungary, Romania and Bulgaria," says Adrian Karczewicz, investment director at Echo Investment, a Polish developer and property manager.
Yields in central Warsaw are about 6.25 per cent, lower than in the rest of the region, where they can be 8.5 per cent or higher, but significantly more than in big west European cities. But for investors looking for a better rate of return with little additional risk compared with Paris or Berlin, Warsaw makes a natural choice.
"Poland looks quite attractive on a risk-adjusted basis," says Anne Kavanagh, global head of asset management and transactions for Axa Real Estate.
However, Poland's slowing economy may also hit investor perceptions later this year and into 2014.
"We are competing with London, Paris and Spain," says Maciej Zajdel, the head of the Polish office of IVG, the German property manager. "We are having our five minutes. The news that we are having a slowdown has not yet gotten out widely. That means we still have about 12 months to continue to attract capital before we hit a wall."