Angel Group is a leading developer, operator and service provider in Poland’s luxury residential segment (hotels & housing communities), headquartered in Krakow and employing over 300 people.
You have been with Angel Group since its very inception, what made you feel comfortable to try such a bold move as opening Poland’s high-end residential market?
I started my real estate career in the UK, working for an agency responsible for finding housing for asylum seekers during the Kosovo war. Then fate took us to Poland, as my business partner’s aunt lived in Krakow and we saw this window of opportunity when traveling there. We started with a demographic analysis and realized a large segment of the young population had a university degree in Poland, and were potential candidates for a luxury product – at the time, this simply did not exist in Poland. What do we mean by luxury? A condominium with all the works, from spacious lodgings to a serviced reception area, gym, communal spaces, meeting rooms, gardens and so on.
Everyone thought we were foolish to consider such a product at the time, because there would be no demand for it, because society could not afford it. Nevertheless, we sensed a demand that was not yet apparent, and developed a beautiful 185 luxury apartment project right behind the Sheraton hotel in central Krakow, which was a roaring success. The vision was to sell for around USD 1,200/sqm, when the market average was USD 600-800/sqm, so quite a leap and one that truly paid off – we did not sell for that amount, but for an average USD 4,000/sqm, this is how good demand was. Turns out people did want higher quality, and most of our clients nowadays are returning clients, financially secure locals for the most part.
This was happening in 2003 – fast-forwarding to present day you have built a brand in and outside Krakow – tell us about your current footprint?
First and foremost, we are a developer, but also a construction and management company. We are active in Krakow, Wroclaw and we also developed Wilanow 1 in Warsaw (2,000 apartments, built alongside an Australian bank), and are the pioneer luxury developer in all three cities. We also manage Hilton Hotel in Wroclaw and our own brand Granary Hotel (consistently ranked #1). We are currently building the Autograph Collection by Marriott in Krakow, which is a novel concept as it combines a 5 star hotel with a luxury apartment complex. Rule number of one for us is location, location, location.
Additionally, in Wroclaw we built an Alzheimer facility called Angel Care focused on medical research in collaboration with experts from Israel, and also operating as a high end care for the elderly. In everything we do we manage the properties from A to Z, meaning from the development and construction phase to managing it for our tenants.
The care facility is quite a unique project, what motivated you to initiate it?
Poland has a rapidly ageing population and the medical system is not where we would want to see it – it is our dream to see a care facility in every city one day. We met the head of the Israeli public hospital (who is also the president of the Global Alzheimer Association) and together we made their vision come true, by taking care of the logistical side of things. We are currently managing it together, dealing with patients instead of tenants, and making them feel as comfortable as possible – like they lived in a beautiful hotel, and not a care facility.
All sounds dreamy, however you have also been through two crises and this is your third – how have you fared and how has the pandemic affected business thus far?
Indeed, the early 2000’s were the first crisis, as we were getting started, followed by the financial crisis of 2008. Covid-19 is the biggest struggle we ever went through, not one of lack of equity, but quite the opposite. There is so much “artificial money”, inflation-free thus far though, pumped into the system to compensate for the income freeze so many businesses are experiencing – hospitality included, of course. Hospitality and AirBnb have obviously been very negatively affected, and we had to come up with temporary solutions such as long-term leasing.
As demand grew, how has the product itself evolved, what do people expect from your facilities?
What started off as innovative now became the norm, and grew ever more sophisticated since – things such as gyms, spas, playgrounds, concierge services etc. are very much expected now, and brought to increasingly higher standards. We have kept control over the construction phases, including finishing touches, to ensure the right quality is met. The population has also been getting increasingly wealthier, Poland leads the charts in terms of new millionaires/ annum in Europe, banks are more open to giving out mortgages and the general economy boomed, so we evolved in tandem.
But if you are asking about what you can expect, we have one very exciting project we are working on – My Tower by Angel Group is our response to an industry in dire need of digitization and higher end technology.
We developed it through a JV with a tech company from Israel and are launching it all over Europe. The idea is converting standard, old fashioned buildings, which are sadly still the norm, into truly smart enterprises, controlled through an app on people’s phones. You can park your car simply by approaching the gate, book spots in the gym and other communal areas, announce guests to the concierge or have parcels delivered and groceries bought automatically, all registered/traced and with zero physical contact. The pandemic has also accelerated the need for such solutions, and our tech also has the ability of checking people’s temperature.
Some might argue that so much technological control is too much – are you living this way, what is your personal take?
I am, and I believe it makes life safer and easier. Every decision in life weighs on two factors, greed and fear. The key is finding the right balance. In the beginning we were all afraid to use smart mobile phones, but fast forward to present day we are all using them, aware of all we stand to gain. And what with covid-19 making people lonelier, this particular technology I am talking about can bring people together, because it allows for closeness and connection with the community, but in a safe, controlled manner.
What does the future have in stock for you, looking at your priorities for the coming years?
In Wroclaw we have three projects being finalized, of which Angel Park will be a fully smart building, ready this June. In Krakow we are in the final stages of building Stradom House, a top class hotel and residence, as well as Angel Green which is our green neighborhood. As more people are working from home, they are appreciating ever more the value of a high quality residence, the ability to have a study for instance, and we are clearly seeing a demand for this.
Do you have a final message for people eyeing Poland’s residential sector?
I am very optimistic about the residential segment thanks to the liquidity available on the market and the low interest rates. It is an ideal time to invest, and biased as I may be, there is no better and safer place to invest in than bricks and mortar. Poland’s economy is also going strong, and real estate supply is not matching up to it, so prices are expected to keep moving up.
