Considerable appetite for Polish properties

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Considerable appetite for Polish properties

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The domestic commercial property investment market closed last year with a record result in terms of transactions completed estimated at approx. 5.1 billion EUR, which represents YoY growth of 11%. The moving of completion of significant transactions to the beginning of this year did not have a negative impact on the result achieved. The last quarter proved to be particularly busy for investor, where transactions of the total value in excess of half of the volume reported in 2017 were finalized.

Retail sector in the lead. Increasing interest in logistics.

The total volume of transactions completed last year in the retail sector was similar to the result achieved in 2016 and stood at nearly 2 billion EUR, which accounts for 37% of total volume of last year’s transactions. One of the key shopping and entertainment centres, i.e. Wrocław’s Magnolia Park, saw a change in its ownership.

Last year investors directed their attention to regional centres and smaller cities, recognizing a number of opportunities for unlocking the potential of the retail properties there in the mid-term horizon. This is the reason for the transactions completed in Sieradz, Kalisz and Inowrocław, as well as those finalized in other, frequently smaller, cities

Piotr Goździewicz, Director, Capital Markets, Central and Eastern Europe

2017 saw 1.74 billion EUR invested in office properties on the Polish market, which accounts for approx. 34% of total transaction volume. Compared to 2016, this sector recorded a drop of approx. 9%.
Between January and December 2017 investors showed considerable interest in products from the warehouse and logistics sector, where a sizeable warehouse transaction accounting for approx. 15% of total investment volume was recorded in the last quarter. Additionally, the takeover by China Investment Corporation of Logicor, one of the leading European companies operating on the logistics and distribution market, was also finalized. The estimated value of Logicor’s Polish assets stood at approx. 750 million EUR. In total, 2017 will go down in history as one with a noticeable increase of warehouse and logistics transactions that accounted for 23% of total investment volume.
The hospitality sector recorded the highest increase ever, as it attracted the attention of players from the Middle East and Asia. The total estimated volume of transactions of 340 million EUR accounted for approx. 7% of the value of last year’s transactions.

Strength in the regions

The high level of investor interest in products available on regional markets is reflected in the high volume of investment transactions concluded there. 2017 saw the regional markets achieve a 70% share in total volume of transactions completed on the market. It is also worth noting that office transactions in the regions accounted for 75% of total volume of office transactions, while Warsaw, the largest market in the CEE region, had to, yet again, give way to the regional markets.
The high interest shown in 2017 in prime products available in the regions resulted in a decrease in the difference in yields for retail and office schemes in the capital and the regions.

The most active players last year were those from Germany, the US, Great Britain and South Africa. However, Poland’s stable economic foundations, positive forecasts and a relatively high level of liquidity attract the attention of capital from the Middle East, China and Thailand. It is also worth noting that an 11% share in last year’s total investment volume was held by investors from the CEE region, where locating capital in Poland constitutes and element of a portfolio diversification strategy

Mateusz Skubiszewski, Director, Capital Markets, Central and Eastern Europe

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