CASE 2

Formation of an institutional income-generating asset in a prime location in
Warsaw, Nowy Świat

The project involves the acquisition and comprehensive renovation of a building located in the central part of Warsaw, followed by the creation of a stabilized mixed-use asset combining high street retail and a residential block for institutional rental (PRS).

The main objective of the project is to transform the existing property into an institutionally clear income-generating asset with a predictable cash flow and the potential for sale to a strategic investor or fund.

Investment Strategy Logic

The project is based on a classic value-add strategy with elements of a core+ product at the stabilization stage.

Value creation is achieved through:
* renovation of the property and improvement of asset quality,
* formation of an institutional income structure,
* leveraging the premium retail location as a value driver,
* creation of long-term stable cash flow through PRS leasing.

This combination allows for a balance between current income and capital value growth.

Asset Concept After Project Implementation

Total building area ≈ 6,000 m²

Functional distribution:
Retail (ground floor) ~1,500 m²
PRS residential ~4,500 m²

Expected number of apartments ≈ 90 units

The average apartment size meets institutional standards and ensures an optimal balance between liquidity and rental yield.

Role of Location

Nowy Świat is one of Warsaw’s key high streets, characterized by:

* stable pedestrian traffic,
* high liquidity of retail spaces,
* resilient demand from international and local tenants,
* limited supply of large properties.

The residential component in the city center generates additional stable demand from long-term tenants and corporate clients.

Key Investment Metrics

  • IRR: ~ 13–15%
  • Equity Multiple: ~ 1.6–1.8×
  • Cash-on-Cash Return: ~ 4–6% per annum
  • Net profit: ~ PLN 25–30 million

Investment Entry

  • Purchase price:
    57,000,000 PLN
  • Transaction costs:
    (included in total investment)
  • Investment renovation:
    9,000,000 PLN
  • Total investment:
    66,000,000 PLN



    • Rental Income

  • Retail annual income:
    2,700,000 PLN per year
  • PRS residential income:
    5,130,000 PLN per year
  • Gross Rental Income:
    7,830,000 PLN per year
  • Net Operating Income (NOI):
    5,580,000 PLN per year



    • Capital Growth and Exit

  • Stabilized exit yield:
    ~6.0%
  • Stabilized asset value:
    93,000,000 PLN
  • Capital growth potential:
    27,000,000 PLN
  • Exit options:
    Sale to fund / institutional investor / long-term hold



    • Investment Math

  • Total investment:
    66,000,000 PLN
  • Annual NOI:
    5,580,000 PLN
  • Yield on Cost:
    8.4–8.5%
  • Stabilized asset value:
    93,000,000 PLN
  • Net profit:
    ~25–30 million PLN



    • Key Considerations

    The calculation:

    * is based on current Warsaw prime market data (Nowy Świat),
    * uses conservative assumptions on vacancy and operating costs,
    * does not assume rental rate growth during stabilization,
    * presents unlevered returns (no debt included).

    The model reflects a mixed-use value-add repositioning with institutional PRS standards and a market-based exit yield for prime central Warsaw.

    Strategy Applicability

    The approach is applied to value-add mixed-use projects in central Warsaw, combining high street retail with institutional PRS housing.

    Property selection prioritizes:
    * prime or prime-adjacent locations with stable demand,
    * strong retail liquidity on high street corridors,
    * predictable exit pricing based on clear market yields,
    * long-term structural demand for rental housing in Śródmieście..

    Stages of Preparing an Investment Proposal

    • Investment Inquiry
    • Preliminary Assessment
    • In-Depth Investment Analysis
    • Selection and Structuring of the Investment Solution
    • Presentation of the Investment Proposal
    • Implementation Support

    Investment Request

    The process starts with an investment request. It allows us to assess the feasibility of cooperation, define the working format, and outline potential investment scenarios. This approach is designed for investors who view Polish real estate as an investment asset and are ready to operate within a structured strategy and financial modeling framework

    Contact us to schedule an initial online meeting

    NIP 7812006025
    OC NR PON 00009482

    Strategic real estate investments in Poland focused on Warsaw. Analytics, structured deals and off-market opportunities for investors.

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