|The WFC sale was one of the biggest deals this year|
Courtesy of Jones Lang LaSalle
Commercial property investment volumes are expected to decrease in Poland this year but a number of spectacular transactions have closed in recent months, including the sale of two office towers in Warsaw, showing that the country is still highly attractive for investors. Moreover, more deals appear to be in the pipeline.
Overall commercial property investment volumes in the CEE region decreased by 60 percent year-on-year to almost €2.1 billion in the first half of 2012, according to CBRE data. However, the most significant decreases were recorded in countries seen as more risky.
Meanwhile, Russia and Poland accounted for 83 percent of the deal flow in the region in H1. Office investment transactions in the Polish market were valued at a total of just €140 million but were expected to surge in the second half of the year.
The retail transactions volume in Poland amounted to €596 million and included the largest deal across CEE in the period – the sale of the Z≥ote Tarasy shopping center in downtown Warsaw.
It is evident that the total investment volume in Poland will decrease this year but the final figure is difficult to forecast since several major deals are now being negotiated and it is not certain if they will be closed in 2012, said Michael Atwell, recently appointed head of CEE capital markets at CBRE.
Mr Atwell stressed that as the largest market in the region and a country with a stable economy and strong fundamentals, Poland continues to be attractive for investors. This, he said, is borne out by several large deals, including the sale of the WFC tower in Warsaw, that the country has seen of late.
There remain ample opportunities to invest in prime property in the Polish market, Mr Atwell said. “What has changed over the last few years is the fact that transactions take longer to negotiate,” he added.
According to Mr Atwell, Warsaw is now getting the most investor attention. Particularly in demand are office buildings located in the capital’s central business district, as well as those in the city’s popular and constantly growing business hub in Mokotów.
Location and visibility are among the factors that count most for investors when choosing potential acquisition assets. “Investment funds are now showing relatively little interest in the regional Polish cities,” Mr Atwell said.
In the retail sector, investor interest is more evenly distributed and investors are generally looking for prime large-scale assets, both in Warsaw and the secondary Polish cities. The recent sale of the Manufaktura mall in £ódľ, for one, is an example of the trend, Mr Atwell added.
Mr Atwell, who most recently worked as partner and head of Cushman & Wakefield’s Middle East operations, after having spent almost a decade in Poland and Hungary, said that more or less the same investors have been active in the Polish market in recent years, although a few new entrants are being seen.
Some of the most active players in the Polish market are now German investment funds and British pension funds. Some major American investors also remain interested in investing in property in the country, he noted.
It remains to be seen whether new investors from other parts of the world will enter Poland in the near future. Some Middle Eastern entities are now investigating investment opportunities in CEE, Mr Atwell said, and pointed out that a Qatari fund bought telecom TP’s headquarters in Warsaw last year.
From Warsaw Business Journal by Adam Zdrodowski
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