Future of Middle East investments in Poland
In 2008 foreign investors allocated almost 11 billion Euro in Poland. Still it is nearly 34% less than in 2007. It is however not sure how much foreign capital we will manage to gather this year. More and more interest is paid in financing from the Middle East. Is there any chance that the businessmen from the Gulf will invest more in Poland?
Hope from the Near East
In the light of the world crisis it is very important to seek new financing resources. The financial markets which are undergoing globalization present a huge range of opportunities. When it comes to the Polish market, the biggest capital engagement is shown by the investors from the UE (81% in 2007), when the businessmen from the Gulf have invested only 4,8 million Euro in 2007 which makes up barely 0,03% of all foreign projects. Since 2007, interest in the capital from the Middle East has increased. The Polish government representatives have recently visited the Middle East countries and in November the Polish prime-minister Donald Tusk is going to pay a visit in the Saudi Arabia. Without doubts, the interest in investment project in Poland seems to be mutual. Sheiks are visiting Poland and collecting information, looking for business partners. They concentrate on the electric power, chemical, cosmetics and real estate market but they have also visited some of the Polish health resorts and the aim of the visits was not their health.
Real estates – a safe choice
For the businessmen from the Middle East, even the crisis-stricken Polish real estate market remains stable – prices declines on the real estate market in Poland were relatively smaller than the dramatic declines in the Middle East countries.
The example of an Arabian capital activity is Griffin Property supporting the Polish developers or the funds of the Shamil Bank from the Bahrain which invests in the real estates of developing countries, including financing of a Wroclaw-based Verity Development. The foreign capital has guaranteed a financial stability to this company and allowed further investing on the Polish market i.e. over 105 million EURO during the last 4 years. When most of the investors struggle with the financial liquidity, Verity Development is preparing hand over of the residential complex in Wrocław, continues and initiates next projects.
The capital from the MIddle East is still impressive and the business relations based on the prohibition to use money for speculation and gain profit from virtual financial resources proved more resistant to the outcomes of the world crisis. It is no surprise that the renowned corporations such as Citygroup or Credit Suisse Group have long used the support of the investment funds based in the Gulf region. The game is worth playing since our market seems extremely attractive due to market fluctuations which are not as significant as in case of our neighbors.