Okam Capital announces new standards on the residential market

Okam Capital, a residential estate’s developer, is preparing to launch its housing scheme in Katowice – “Dom w Dolinie Trzech Stawów” (House in the Three Ponds Valley), a complex of luxury apartments’ buildings. Arie Koren, co-founder and general director of Okam, talks to katowicethecity.com about the market in Katowice and the company’s project in the City.

© Okam Capital; Dom w Dolinie Trzech Stawów
© Okam Capital; Dom w Dolinie Trzech Stawów

Okam Capital is investing in several Polish cities including Warsaw, Łódź and Katowice. Can you explain which factors had decided that you chose Katowice for you residential scheme?

Arie Karen: Our company is present in Katowice since 2008 when we bought a tenement on Staromiejska/Wawelska Streets in the City Center. Then we discovered that Katowice offers a great investment opportunities according to all economic factors like an unemployment rate, salaries, location in comparison to prices of real estate. This combination showed us Katowice is a good place for business. Afterwards we were looking for a plot to conduct a residential scheme. Last year we had found the plot in the Three Ponds Valley and this year we finalized the transaction.

You are going to build 264 apartments of upper standard within the project. Do you think the local market is prepared for these type of investments?

AK: We are going to put the investment on the top of the top. And there is no competition for the project. We would like to do it in the same luxurious way as it is in our best project in Warsaw. Additionally, in my opinion the plot is in the best location in Katowice. It means that no one can compare to the project in the City. 264 apartments is nothing when we look on the number of agglomeration’s inhabitants. I am pretty sure the Three Ponds’ investment will not be the last one of Okam in Katowice.

Do you already have any other plots in the City?

AK: No. But I do not think it is a problem as the economic situation in Europe is getting worse. I want to see we made a success with the first project and then we can look for another location. I want only the best [plot]. I do not want to compromise. We are patient and we will find the best one.

When we look into statistics the number of apartments sold in Katowice over the recent years is the lowest amongst the biggest Polish cities as well as the prices per one square meter of the primary market. Are you convinced to locate the upper standard residential project here?

AK: Until now none of developers delivered a good product on this local market. If people have money they are looking for an upper standard apartment but they could not find it as most of developers build cheap. Consequently, people were choosing semi-detached houses or private houses. What I am doing in Katowice is better than in Warsaw when it comes to quality and I am giving a lower price – in Warsaw it is PLN 8 500 per one sq. meter, in Katowice is PLN 6 500. It is PLN 2 000 cheaper but you will get even a better quality of the investment.

However, the average price on the primary market in the capital of Poland is PLN 8 500, the same what you offer for you apartments in Warsaw. In Katowice the average price is PLN 5 500. It is PLN 1 000 less than your offer for you project here.

AK: Yes, our price is PLN 1 000 higher than the average but you get a better quality product than in Warsaw. For example, the income of inhabitants of Poznań or Gdańsk is lower than in Katowice but they buy apartments for PLN 6 500 – 7 000. Why citizens of Katowice do not do that? Because there is no good product on the market.

You are pretty sure to sell all the 264 apartments…

AK: I believe in this investment. Many of real estate consultants were telling me to build cheap, to use plastic windows or to give up on a gym, tennis club or lobby, and to reduce costs. I think when you get the best plot in Katowice, you should build a proper product. I believe it will work and I will be able to say soon that people in Katowice are prepared to pay a little more and to get a lot more. The time is now. We prepared the project very slowly and carefully. All around the world, buying an apartment is the biggest investment in life for an average person. What I am going to do is to offer them the best product for their biggest investment.

You purchased the plot together with a design project. You did it the same in Warsaw. Is it your strategy?

AK: The strategy is to find a good location. In 2010 I had watched about 15-20 plots in Katowice before I decided for the Three Ponds’ plot. Generally I do not buy plots without planning consent approved. I am not gambling. I prefer plots without building permit. The building permits make that I can not touch it. In this case we checked the permit and it was ok. We did a little changes, for example we added the lobby, used better interior materials and changed the facade.

Can you tell something more about the architecture and used materials?

Piotr Szymoński, New Investments Manager at Okam: Konior Studio is responsible for the architecture and interior design. We started from redesigning of the apartments. In our opinion, the previous interior design did not meet expectations of the market and clients. Also we changed the materials for common spaces and paid a lot of attention to small architecture. Our philosophy is to offer not only a good apartment but also, important is the area around. That is why we are going to provide the best shops with all services on the highest level, like the gym or a shopping market.

AK: All common spaces will be finished with classy materials. The apartments were designed to provide a higher standard for inhabitants, e.g. they will have two bathrooms at disposal. The housing estate will be gated and controlled by cameras.

When are you going to start the construction work?

AK: We are going to start in February 2012. We are finishing a tender procedures at present to choose a prime contractor. There were seven bidders. Now we are negotiating with two of them, we hope to decide the tender this month. Also we finalize the final stage of negotiations with two banks and next we will sign an agreement for financing.

How many stages of the construction work do you plan?

AK: Three. There are five buildings. We will build two buildings in the first stage, one in the second, and the last two in the third stage. Afterwards we would like to develop businesses of Okam Capital in the region of Katowice as we feel good here. The feeling is that the potential of the agglomeration is still rising. The City is improving thanks to a redevelopment of the City Center and the Railway Station, new shopping malls, Mariacka Street which underwent a tremendous change lately. You are inside and maybe you do not see how Katowice is changing. We came here and we felt this is a good place to invest.