Sitting in his swish, Norman Foster-designed office, Richard Walker is the epitome of the successful property investor.
He might be just 27, but the Chester-born entrepreneur has already amassed a portfolio worth €30m in the two years his company has been in operation. He looks and sounds every inch the property magnate. But there is one thing that sets him and his company apart from contemporaries such as Downing or Bruntwood. Because Walker's flash offices aren't based in Manchester or Liverpool but at one of the most exclusive addresses in Warsaw, Poland.
Walker has joined forces with the Liverpool-based commercial landlord, Ethel Austin Property Group, which specialises in funding joint venture projects with developers, to create Ethel Austin Poland. EAPG owns more than 1,000 properties totalling 5m sq ft, and its portfolio includes JVs at Vermont Developments' £100m Sefton Street scheme and the Beetham Organisation's 101 Old Hall Street redevelopment, both in Liverpool.
Walker is among a new breed of investors who are finding opportunities in the post-communist countries of Eastern Europe.
While debate rages about the merits and drawbacks of the influx of Polish natives seen in Britain since Poland joined the European Union in 2004, there are plenty of Brits happy to head in the opposite direction to find their own wealth. And while the deals aren't what they once were – when the country joined the EU in 2004, the exchange rate was 7.13 zloty to the pound, while today it is 4.96 zloty to the pound – there is still a general consensus amongst the 2,500 Britons currently living in Poland that there are many opportunities afforded to a young Brit with money to invest.
There isn't the discrepancy between locals and ex-pats than you get in places like Dubai
Which is exactly how you could describe Walker. After a role with surveyors Jones Lang LaSalle in London, Walker felt he wanted a new challenge – and was prepared to look further afield than the British Isles to find it.
"Working for Jones Lang LaSalle in London was good, but I always wanted to do my own thing," he explains.
"I had read an awful lot about the money to be made in Central Europe and found that Poland offered a good balance between risk and return. I got a job with JLL in Poland for about six months and then set up on my own."
Fortunately for Walker, he wasn't quite on his own – EAPG, with whom he had family connections through the retail trade – agreed to be a joint venture partner.
"My first project was a residential one of 16 luxury apartments," Walker says. "We decided to buy a completed development and that got me up and running. Once we had a track record the deals were presented to us much more easily. For the first six months I was on my own. I rented a small windowless office and yes, it was difficult, but after six months I was joined by a former colleague, Theo Mitchell, who came out from the UK, so there was two of us.
The first deal, as it turned out, has been the only one residential scheme to date. After that came the sort of office and High Street retail investments that had been previously ignored by foreign investors but were EAPG's mainstays in the UK.
"Our key differentiator was that the deals we were targeting were below the radar of all the individual companies who were only interested in big skyscraper deals," Walker says. "If a property was more than a two-hour drive from the airport, they wouldn't get around to seeing it.
"Out niche is smaller, below the investor radar deals which are also above the radar of local businessmen. We are just opportunistic, so we will buy or invest in anything we think has enough value."
Perhaps surprisingly, Walker says the EAP strategy has so far failed to irk the Polish investors who must surely feel that the type of foreign investment being bandied around means they will be forever on the bottom rung of the property ladder.
"They are overwhelmingly positive about it. Warsaw is changing so quickly and everyone is out to do well here. There isn't the discrepancy between locals and ex-pats than you get in places like Dubai."
But while there are clearly opportunities in Poland, there must surely be drawbacks?
"It is very different from operating in England," Walker concedes. "It is not as transparent and the market is not as fluid so deals take a very long time to happen. There was a long period of adjustment where I had to get used to the Polish way of doing things. It has also become more expensive – the average price of a two-bedroom flat in Warsaw is now £70,000 and commercial rent is around €2.32/sq ft.
"The rental yields are not as strong as they were – they were very good for buyers but there has been a lot of yield compression for the last couple of years. Prime yields are for office and retail at around the 5.5%. They have come down from 7-8% a couple of years ago.
"It also took a while to flag up the brand name and to get known as someone who does deals in Poland. But that is happening. We have developed a total portfolio of €30m but want to grow to €50m by the end of the year."
The business case for moving to Poland is clearly a sound one. But the standard-of-living case, in the past at least, has been less so. Just the mention of the country still conjures up grim images of concrete tower blocks and bleak, dimly lit squares. But judge this particular book by its cover, and you might, according to Walker, be missing a trick. Not many of us are privy to the knowledge, for example, that 28% of the country is covered by forest, or that there are almost 10,000 lakes, 23 national parks, dozens of mountains, and a beautiful coastline.
"I think there is a fixed view of what new Europe is like, but when I got to Warsaw I was impressed with how great the city was and what a great life we could have here," says Walker, who moved to Poland with his girlfriend.
"We have got a good social life here and my girlfriend works for the embassy so we know a lot of Brits but we know a lot of Poles too.
"Poland is developing but all of our friends who have come here to visit have been really impressed because it is quite Westernised."
There are opportunities aplenty in Poland. The question is whether the country is big enough for more than one EAP.
EAP's top three acquisitions
- Szczin: Bought for €14m, Walker says this office building, which includes consulates amongst its tenants, typifies what EAP is trying to do in bringing a UK asset management approach to Poland
- Gdymia: €3m, High Street offices with rental growth opportunities
- Pznan: €3m, offices with room for growth