MDDP advised on the White Stone Development and Nrep transaction in the PRS market

Experts from MDDP Michalik Dłuska Dziedzic i Partnerzy advised on the transaction between White Stone Development and Nrep concerning the latest PRS development in Warsaw’s Bielany district. MDDP’s support included comprehensive tax advice on the transaction, including obtaining tax interpretations.

The teams were led by Piotr Paśko and Katarzyna Kozakowska, who were supported by Paweł Goś, Kamil Kruk, Sebastian Serowik, Krzysztof Bielawny, Bartosz Bogdański, Dariusz Fistek, Agnieszka Ośka. Legal services were provided by Baker McKenzie and Greenberg Traurig law firms, and transactional advice by Colliers.

White Stone Development is responsible for the construction and, upon completion, will hand over the project to Nrep, which manages the buildings under the Lett brand. The plan is for the development to include a modern 15,500 sq ft building with more than 480 units and 400 sq ft of leasable retail space.

MDDP on the PRS market

The realisation of the White Stone Development and Nrep is yet another transaction on the PRS market, which is supported on the tax side by MDDP’s Real Estate Team, led by Justyna Bauta-Szostak. Since 2017, we have been providing comprehensive tax advisory services to leading entities of the rapidly growing institutional rental market in Poland (Private Rental Sector) at all stages of activity – from decision-making and selection of the optimal legal form for the investment, through ongoing advice related to the specifics of PRS activity. MDDP’s Real Estate team cooperates on PRS topics with the Polish Association of Development Companies, with which, among other things, it prepared the report ‘PRS Sector in Poland’.

PRS market in Poland

There has been a lot of talk about PRS in recent years, as the sector, due to the structural shortage of premises available for rent, has been growing ever stronger in Poland. And although it is becoming an important part of the real estate market in Poland, the tax regulations for this market raise interpretative questions that affect the tax security of entities operating in this market. For example, residential rental, short-term rental (accommodation service) and commercial rental are different situations and three different VAT rates in the PRS market.