Poland’s national railway uses its real estate to the country’s benefit

Originally Published in March 2018

PKP S.A. was established via the commercialization of the Polish State Railways. The State Treasury is its sole shareholder. PKP S.A. oversees the PKP Group companies to ensure the highest quality of passenger transport and logistics services. It is also one of the largest property owners in Poland. The company’s holdings include about 96,000 hectares of land and 52,000 buildings and structures. Some assets are used for transportation services (railway stations), while others are strictly commercial. PKP S.A. is actively seeking and initiating new investments, looking for ways to optimally manage the railway properties.

“PKP’s new real estate management strategy will, above all, translate into economic development and will allow the company achieve long-term goals,” said PKP CEO Krzysztof Mamiński. “The huge selloff of valuable railway assets in recent years was a step in the wrong direction. Our goal is to maximize our properties’ potential. Many of them are located near railway stations with road access. These are the areas where we intend to develop shipping and logistics activities. So far, we have identified about 80 suitable properties and we are actively looking for investment partners. PKP Group has also established a new company, Xcity Investment, to cooperate with private developers in creating new urban spaces.”

Mr. Mamiński continued: “As one of the key Treasury companies and the largest property holder in Poland, we are actively participating in the government-run program ‘Mieszkanie Plus’ (Apartment Plus), which is of great social and economic importance, providing more affordable housing in the country.”

He added: “We are implementing the largest investment program in the history of the Polish railway. It covers about 200 railway stations – some of them will be thoroughly modernized, and some built from scratch as part of the Innovative Systemic Stations (IDS) program. The program’s purpose is to increase the competitiveness of rail transport by demolishing old buildings and replacing them with environmentally friendly facilities. We focus on big cities and small towns, with stations next to modernized or soon-to-be-modernized railway lines. This synergy effect is supposed to make the railway transport more significant and become a strong pro-development impulse for the individual regions.”

Currently, there are about 36 land terminals in Poland. PKP S.A. has many plots that could be developed for the construction of logistics centers, rail ports or intermodal terminals. These properties vary between several and several dozen hectares in area. PKP S.A. is currently looking for investors interested in logistics development. One of the first projects is being implemented in cooperation with the Polish Post, for the expansion of the broadly understood Transport-Shipping-Logistics market. Plans include the construction of an intermodal terminal in Konin and a multimodal terminal or a cargo handling and logistics services point in Rybnik. The company is also holding talks with several sea ports, discussing potential cooperation in logistics expansion.

“Mieszkanie Plus” (Apartment Plus) is a government housing program that aims to increase the number of affordable apartments with the use of State Treasury properties. PKP S.A. has already submitted 238 properties suitable for development, with a total area of nearly 600 hectares, and a total value of about PLN 1.3 billion. The selected properties are in cities throughout Poland with more than 20,000 inhabitants. Apartments built on state-owned land should be cheaper and more accessible to people with modest incomes.

PKP S.A. is carrying out an extensive railway station investment program throughout the country. The company intends to modernize or build around 200 railway stations before the end of 2023. Some of the stations intended for modernization are historic buildings, which will be returned to their former splendor. Currently, more than 160 facilities are being redeveloped.

Other planned investments foresee the construction of completely new, energy-saving and ecological modular facilities, emerging in the place of decaying, nonfunctional stations. The main goal of the program is to provide excellent travel service in all PKP’s facilities that would match 21st-century standards. Railway stations will be adapted to the needs of all passenger groups, including people with reduced mobility. More and more stations are to function as interchanges, integrating various branches of transport.

<blockquote><span style=”font-weight: 400;”>“We are implementing the largest investment program in the history of the Polish railway.” – PKP CEO President Krzysztof Mamiński.</span></blockquote>

PKP S.A. established a new company, Xcity Investment, at the beginning of 2015. Its task is to identify and implement development projects on railway real estate in cooperation with private investors. All Xcity’s developments are carried out as joint venture projects. “The scope of our activity includes the construction of centrally located office, commercial and residential buildings, as well as hotels and logistics centers in many Polish cities,” said Marek Chibowski, CEO of Xcity Investment.

Xcity Investment is also analyzing the potential of other locations and plans to expand its business to include warehouse investments. Currently, the company has 25 projects at various stages of progress. According to its strategy, the company will have 40 projects by the end of 2018. Projects currently implemented by Xcity include: Warsaw Gdańsk with Ghelamco, Poznań Główny (stage III) with TriGranit, Gdynia Międzytorze with Semeko Investment Group, Kraków Bosacka with GD & K Investment and Mińsk Mazowiecki and Konin with Dekada Realty.

Plans include a project called Centralna Park (Central Park), located on a two-hectare plot in the very center of Warsaw. A building complex combining office space, commercial services and hotel functions will be constructed next to the Warszawa Centralna railway station.