There was a lot of interest in the Warsaw stand at this year's Expo Real Agnieszka Kuczyńska/WBJ

Poland provided a strong presence and enjoyed significant investor attention at this year’s Expo Real commercial property fair in Munich, Germany, with the stability of the country’s real estate market proving to be a recurrent theme at the event.

Sustained interest

Asked about investor inquiries concerning Poland at this year’s Expo Real, Przemysław Felicki, director in the capital markets department of CBRE, stressed that the country continues to see considerable demand for prime commercial space.

“Both the funds which are already present in our market and those, including entities from the US and Scandinavia, which are still preparing for an entry, are interested in new acquisitions in Poland, Mr Felicki said.

He added that investors were looking for products in the office, retail and logistics sectors alike. When it comes to office space, investors were mostly interested in Warsaw locations, whereas in the retail segment of the market there was also demand for prime regional malls.

According to Mr Felicki, the commercial property investment volume in Poland amounted to €1.1 billion in the first three quarters of 2012. “By the end of the year, the figure will likely go up to around €2 billion so the prospects are promising,” he said.

Market stability

During a special panel discussion devoted to Poland, representatives of two of the largest investment funds active in the country commended the Polish market for its stability and liquidity, saying that these factors allow for a relatively safe allocation of assets.

Stefan Brendgen, CEO at Allianz Real Estate Germany, noted that investment in real estate remains an attractive option, compared to other alternatives, including bonds.

He added that many Western European cities, including London, Paris and some German cities, are now overpriced. Warsaw offers yields of from 6.5 percent to 7 percent, which are unheard of in many other European markets, Mr Brendgen said.

Bernhard Berg, member of the executive committee of IVG Immobilien, said that his company is focusing on the office sector in Poland, which it sees as very liquid and offering stable income and good returns. IVG has already raised €100 million in equity for its IVG Warsaw fund.

Growth potential

The Polish capital remained in the spotlight as the Polish city which has been getting by far the most investor attention of late. Discussions focused on issues including the amount of new office supply that Warsaw could see developed in upcoming years.

Warsaw City Hall representatives stressed that there are still gaps to fill in a number of central locations in the city and that investors are welcome to propose high-rise projects in places including the capital’s Wola district.

Michał Olszewski, deputy mayor of Warsaw, said that according to some estimates the existing office supply in the capital could double to around six million sqm by 2016. Marcin Juszczyk, board member at Capital Park, added that up to five million sqm could now be in the pipeline in the city.

He stressed, however, that the pace of development could be slower due to factors including difficulties in obtaining bank financing. IVG’s Berg and Allianz’s Brendgen agreed that the Warsaw market is in for growth since it is still relatively small, compared to some of its West European peers.