BGK Nieruchomości wants to buy apartments for rent

Bank Gospodarstwa Krajowego (BGK), Poland’s only state-owned bank, is preparing to set up the Apartments for Rent Fund, the purpose of which is to buy approximately 20 000 apartments across the biggest Polish agglomerations. The bank also mentions Katowice as one of the destinations.

BGK wants to establish a subsidiary called BGK Nieruchomości, which will be responsible for the project management. The fund will spend PLN 5 billion to purchase buildings as well as sections of residential buildings and rent them. The advantage of the fund and its competitive offer will be based on lower costs of money – having its own budget supported by agreements with the Ministry of Finance, BGK does not pay any loan commissions to banks. Also, the company will have a much stronger negotiating position when buying a whole building instead of one apartment. This way the fund will be able to offer a lower price for renting the housing premises.

According to the EurobuildCEE portal’s interview with Piotr Kuszewski, the director of the capital investment department of Bank Gospodarstwa Krajowego, BGK Nieruchomości will start investing in places with the highest demand for apartments for rent. „We believe they are going to be within the largest conurbations: Warsaw, Kraków, the TriCity, Poznań, Wrocław, Katowice and Łódź” – he said.

The fund will look for residential properties that are well located, improved by surrounding infrastructure and are characterized by high standard of completion. „Lowering the standard, e.g. buying buildings that do not have a sufficient number of parking spaces or playgrounds, is out of the question. Such properties deteriorate quickly and have no potential in terms of long-term renting” – Piotr Kuszewski told to EurobuildCEE. Rental premises of BGK Nieruchomości will be also equipped with cookers and fridges, among others improvements. Additionally, it is considered to locate laundry rooms in buildings’ basements.

BGK Nieruchomości expects to kick-off its activity by the end of Q1 2014. The fund has not yet made any official decisions about the exact residential projects that can be considered for the purchase.