Poland on track to hit ?2.5 billion Investment total in 2012
According to Savills research, commercial property investment volumes in Poland are set to exceed ?1 billion in the second half of 2012, beating the H1 volume recorded at ?856 million. The firm attributes this significant rise to a healthy pipeline of preliminary agreements and investment transactions in progress and expects Poland’s total investment volume to reach between ?2bn to ?2.5bn by year end, similar to 2011 levels.
The international real estate advisor notes that although in transactional terms H1 2012 was 15% lower than H1 2011, Poland remains the major investment market in the CEE region, and predicts that it will maintain this position.
Michal Cwiklinski, Head of Investment at Savills Poland, comments: “With levels of domestic investment increasing and Poland as popular as ever among international investors, it has firmly established its position at the top of the CEE market. As several significant preliminary agreements have been signed and other major transactions are in progress, we look forward to a very positive H2 2012.”
Four deals in the retail sector accounted for circa 70% of the H1 2012 investment volume according to Savills data. This is primarily due the acquisition by a fund managed by AXA Real Estate and CBRE Central Europe of a major stake in the 113,500 sq m (1.2m sq ft) Zlote Tarasy mixed-use retail and office centre in Warsaw.
The largest office deal in H1 12 was the acquisition of the second phase of Harmony Office Center in Warsaw by Azora for ?54m, while the most significant warehouse deal in this period was the sale of a portfolio of 11 properties by Prologis to Hines Global REIT for ?98m. Savills anticipates an increase in activity in the warehouse sector in the coming months due to an improved occupational market.
Warsaw continues to be the country’s most sought after location for investment, particularly in the office sector, which saw just one out of five deals in H1 taking place outside the capital.
International investors continued to dominate the market in the first half of 2012, accounting for two thirds of transactions. Nonetheless Savills notes that domestic investors are playing an increasingly importantly role in all sectors, with total acquisitions in H1 2012 amounting to almost ?47m. Savills expects that German, UK and US investors will continue as the most active buyers in Poland going forward.
Michal Stepien, Senior Consultant in the research team at Savills Poland, says: “International and domestic investors are primarily targeting top prime and opportunistic assets, making the Polish market increasingly polarised. We expect prime yields to remain stable for the remainder of 2012, particularly in the Warsaw CBD.”