Savills: Investment volume in Poland on track to exceed €2 billion in 2011 (PL)
Friday 5 August 2011
The investment volume in Poland’s commercial real estate market reached just over €1 billion in the first half of 2011 according to research by international real estate advisor Savills, reflecting rising investment activity in Poland and confirming its strong position in Central and Eastern Europe.
The H1 total represents almost 60% of the total investment volume in 2010 (€1.73 billion) and Savills researchers believe that turnover in Poland is still on track to exceed €2 billion by the end of 2011, as forecasted by the firm earlier this year, representing a return to 2007 levels.
In terms of the number of transactions in Q2 2011 the retail sector dominated the market with eight transactions signed, compared with seven office deals and five warehouse transactions according to Savills research.
Significant deals include the acquisition of Promenada shopping center by Atrium for over €170 million, the acquisition of the remaining 50% share in Wars Sawa Junior department stores by ING for €79 million and several shopping centers in Polish regional and secondary cities.
The real estate advisor expects the retail sector to further increase its market share in the second half of 2011 due to a number of pending investment transactions, but believes that prime office buildings in Warsaw will remain the most targeted stock despite a shrinking availability of such investment product.
Savills has also continued to observe an increased interest from investors in the regional office market where they can benefit from relatively good quality properties offering long leases at a rate of approximately 50-75 bps discount to Warsaw.
Michal Cwiklinski, Head of Investment at Savills Poland, says: “The dominance of retail deals in the second quarter of 2011 confirms a growing interest of investors in well-established retail assets particularly in Poland’s regional markets and smaller cities. We expect to see this trend become more visible in the coming months, especially in view of the shrinking availability of prime office properties.”
Overall Warsaw continued to be the most targeted location for investors in Q2 2011 according to Savills, where both prime office yields and prime retail yields remained stable at approximately 6.5%. In the major regional markets Savills research indicates that prime office yields stand at approximately 7.25% and prime retail yields at between 6.5-7%. The most active investors in Poland in the quarter continued to be Austrian, German and UK buyers.
Michal Stepien, Head of Research Savills Poland, comments: “The Polish property investment market remains one of the most targeted in the CEE region for foreign investors thanks in part to the relatively stable Polish economy. We expect the total volume of investment transactions to exceed €2 billion by the end of the year, which will be the highest level since 2007.”