JLL advised the EBRD on granting a loan to LifeSpot

The European Bank for Reconstruction and Development (EBRD) has approved a loan of €25 million to LifeSpot to finance the development and operation of BTR projects across Poland. Currently, LifeSpot ranks third in terms of the number of rental apartments which are either operating or planned, located in Warsaw and regional cities (Kraków, Wrocław, Tri-city, Łódź and Katowice). The target size of LifeSpot's operations is 10,000 rental apartments.

The process is already EBRD's third successfully closed financing operation in Poland's private rented sector. At the end of 2022, EBRD granted a loan of up to €50 million to Resi4Rent, the largest entity operating in the Polish private rented sector, to build and operate a portfolio of rental apartments across major cities. Subsequently, in April 2023, EBRD granted a PLN loan in the equivalent of €50 million to the Polish subsidiaries of NREP, one of the largest real estate investors in Northern Europe with more than €19 billion of assets under management, to finance two BTR projects in Warsaw.

JLL assisted EBRD in all financing operations related to the Polish PRS market. In the case of NREP and LifeSpot, JLL was appointed by the EBRD to provide commercial due diligence reports for planned BTR projects. As the leading advisor in the Polish living sector, JLL has been involved in most transactions – residential, co-living and student housing. Since the inception of the BTR and PBSA sector in Poland in 2015, JLL has been involved in two-thirds of the total advised transaction volume in the Polish living sector.

Urszula Kowalska, Director within the Living Investments team at JLL, said: "We have been observing an increasing interest from institutional investors who recognise the urgent need for rental stock and significant potential of the institutional BTR sector in Poland. Investors remain eager to invest, but high financing costs remain an obstacle for many of them, as most rental agreements continue to be denominated in the local currency. We are pleased that our market knowledge and transactional experience contributed to financing new BTR projects delivered by reliable investors and, consequently, to the increase in the supply of rental stock, so much needed in the largest cities in Poland."

Poland is struggling with a vast housing gap. Only in the six largest cities (Warsaw, Kraków, Tri-city, Wrocław, Poznań, Łódź), the deficit is estimated at half a million units, excluding war migration. The additional migration long-term housing gap in these cities is estimated at around 100-200 thousand units. The rental market in Poland consists mainly of apartments offered by private individuals, most of which are characterised by a low standard and not adapted to tenants' needs. For example, only a few hundred modern apartments below 60 sqm were recently available for rent on the private market in Warsaw.

The market's growing maturity is the reason for the increasing activity of investors not yet present in the Polish market and specialising in acquiring BTR projects, setting up JV structures or developing BTR rental platforms by acquiring residential developers. Yet, currently, there are only 14,750 units available in the institutional rental stock in Poland. These projects are highly popular among tenants, as confirmed by the near-full occupancy across cities and an average lease-up period of less than six months.