A Public-private Partnership or an Operating Leaseback: Alternative Sources of Financing Public Purpose Real Estate in Poland
A Public-private Partnership or an Operating Leaseback: Alternative Sources of Financing Public Purpose Real Estate in Poland

Summary/Abstract: Purpose: Public investment in the real estate sector is characterised by high capital intensity and a long-term character with low profitability. Local government units and central authorities are obliged to obtain funds for the construction and, in the next stage, for the operation of real estate. The external financing of public purpose real estate, which does not require the use of own resources, or at least not in full, becomes an attractive form of the implementation of the tasks of local governments. The aim of the study is to compare two forms of financing local government real estate: a public-private partnership and leasing, to assess these mechanisms and to indicate the barriers to their use in Poland. Methods: The article presents a comparative analysis of two ways of financing pub projects. Simple statistical tools were used to illustrate the problem and Wards method allows for the grouping of facilities. The analyses were preceded by literature studies. Findings: The main determinant of the low popularity of PPPs and operating leaseback in relation to real estate in Poland is an unfavourable economic and legal environment of the real estate market and the characteristics of the object of investment in the physical, economic and legal aspect. There is no reliable data on the use of operational reverse leasing by local governments. It was not possible to perform a statistical analysis but only a theoretical one. Research implications: The survey should encourage local governments to consider the possibility of financing real estate investments with the use of operational leaseback and the PPP formula in future projects.

• Details
• Contents