Ten years ago Praga, an outland of vast, ancient factory shells that loomed over the eastern side of the Vistula river, had some of the poorest and most dangerous streets in Warsaw. Then the low rents prompted artists to move in and the area slowly began to transform itself. Today, the intense economic regeneration of this once-gritty industrial neighbourhood has earned it a new nickname: Glitzkrieg.

Renovated pre-war manufacturing plants and warehouses have been transformed into chic hangouts, with clubs, bars, restaurants and art galleries snaking through the historic streets. The most established of these is the 19th- century Koneser vodka factory straddling Zabkowska Street, where Steven Spielberg shot parts of Schindler’s List, and Roman Polanski The Pianist. Last year, when the city officially declared the factory a centre of cultural excellence, a series of artistic ventures to celebrate the occasion – including open-air productions from the Warsaw National Theatre – drew in cool, young and upwardly mobile Varsovians in their thousands.

With the slogan ‘the right side of the city’ gaining currency, property developers are looking to cash in big time. One real-estate giant, BBI Development, has bought up 50,000m2 of space inside the vodka factory and intends to turn it into offices and apartments over the next few months. At the same time, PBM Poludnie Development has started refurbishing a 3,000m2 warehouse, dating back to 1873, which it plans to transform into a sparkling office-cum-residential centre. But the area is more than just a frenzy of old buildings being sandblasted: GetHouse Developer recently began work nearby on a sleek, modern block of 41 apartments.

Other regeneration projects include the Soho Factory, a former car plant that opened in 1923, churned out Warszawas and Syrenas and reached its heyday in the 60s with the Fiat 125. Now several art galleries are under its roof and business conferences and trade fairs are held there. Nearby, marmalade factory Fabryka Trzciny has been reimagined as a cultural centre with a club, a theatre, a restaurant, artist ateliers, a concert venue, galleries and exhibition areas, and an old mill is now one of the area’s finest restaurants, Porto Praga. Gilding the area’s new status, Aston Martin moved in last year to join the Jaguar and Land Rover showrooms on Waszyngtona Street, where few residents would recognise a Polski Fiat. “It’s a good place for us to be – close to the embassies, good for commuting across the river, and growing more and more popular,” says Aston Martin’s Pawel Kuskowski.

To cope with that increasing popularity, the city has commissioned France’s SYSTRA to build a 280m bridge, costing €3m, to span the river. Also in the pipeline is a tramway from the centre of Warsaw Old Town right into the heart of Praga. Both are due for completion later this year.

Driving both projects is the fact that next year, tens of thousands of tourists will descend on the city for the Euro 2012 football tournament, to be held in the new national stadium. Hailed as the most modern in Europe, the stadium will boast 58,000 seats, a hotel, conference rooms, restaurants, bars and cafes. The Ministry of Sport and Tourism says it will be used for both “business and leisure purposes”.

Also on the horizon is an ambitious waterside project called Port Praski. The 38 acres of prime real estate earmarked for a makeover is the sort of place that developers of cafes, restaurants and bars will no doubt start drooling over once the wider economy stabilises.

“My grandparents remember the blitzkrieg,” smiles Monika Kuchalska, a 30-year-old businesswoman and local resident. “When I have my own grandchildren I’ll tell them all about this – the Glitzkrieg.” Edward Wight