Poland is attracting strong interest from Asian investors. In the Czech Republic investment is heavily dominated by Czech buyers, while in Romania the investment volume last year reached nearly 1 billion euro. Despite some obstacles to development, the prospects for all three markets are very promising.
Polska – rekordowy rok w sektorze inwestycyjnym na rynku nieruchomości
Całkowity wolumen transakcji zawartych na polskim rynku nieruchomości wyniósł w roku 2018 blisko 7.3 mld euro, w ten sposób bijąc o 43% rekordowy wynik osiągnięty w roku poprzednim. Stopniowo zwiększający się poziom zainteresowania polskim rynkiem po stronie inwestorów azjatyckich z krajów takich jak Malezja, Chiny, Singapur i Korea Południowa obserwowany jest już od trzech lat.
In 2018 the office sector in Poland continued to show strong momentum both in Warsaw and on the country’s smaller regional markets. Tenant demand, spurred by growing employment, expansions of occupied space and relocations to premises of higher quality, remained unflagging. Overall gross take-up in Poland exceeded 1.5 million square metres, of which net take-up constituted approx. 73%. In Warsaw gross take-up reached 858 000 square metres, up by 30% on the 10-year average, and was the best total ever recorded in the city. At the end of 2018 the office market in Poland reached nearly 10.4 million square metres, of which 53% is located in Warsaw.
In the course of 2018, due to the improving occupancy rate, the gap between headline and effective rents has continued to close, with a further contribution in the form of a substantial increase in construction and fit-out costs recorded over the past two years
Marcin Klammer, Chief Executive Officer Central and Eastern Europe BNP Paribas Real Estate
The modern retail sector with over 14.6 million square metres of GLA across all formats offers a wide range of opportunities for brands of various selection, profile and positioning. Shopping centres vary from the most modern leisure-driven shopping malls in large agglomerations to small strip malls in towns with approx. 15–20 thousand of residents. The retail sector in Poland has reached a stage of maturity, hence the pace of growth of the market has slowed down considerably. Subdued new supply of 2017–2018 and limited pipeline indicate an inescapable upheaval in traditional retailing. Remodelling and refurbishment of older schemes, usually aimed at inclusion of new retail concepts as well as F&B and leisure facilities, have become one of the major triggers of market development.
The industrial and logistics sector in Poland has boomed for the past three years, and thereby investor appetite for products in this segment remained very strong in 2018. A volume of over €1.9 billion was traded, representing a new record-breaking result in this sector and an increase by over 60% on 2017. Only in two years the total warehouse stock grew by 40% and reached 15.7 million square metres. At the same time the vacancy rate has remained very low, recording a mere 5.1% at the end of 2018. Such a low availability of free warehouse space results from strong tenant demand. The total volume of net take-up in Poland reached the record-breaking level of 3.1 million square metres in 2018. It is the fourth greatest result in the European Union, surpassed only by the largest economies: Germany, France and the UK.
The Czech Republic – stable and mature market with low investment risk
The Czech investment market is mature with a large and strong pool of domestic investors. Last year Czech buyers stood behind more than 60% of the total investment volume of €2.6 billion. Additionally, Czech investor activity means liquidity and potential for exit for international investors. Offices were the most traded asset class in 2018 (44%) followed by retail (29%) and industrial (22%).
The office market in the Czech Republic is heavily dominated by the capital city. Prague has seen declining vacancy rates in recent years as a result of robust occupier demand and subdued supply. Vacancy rates are currently at historical lows. In 2018 approx. 131 000 square metres of office space were completed in Prague, and this year more than 200 000 square metres will be added to the market, although a large part of this is pre-leased already and the remaining available space will be absorbed quickly by the market upon completion.
Czeski rynek powierzchni handlowych czerpie znaczne korzyści z dynamicznie wzrastającego poziomu konsumpcji i sprzedaży detalicznej. W roku 2018 czynsze w najatrakcyjniejszych obiektach nadal wzrastały i istnieje duże prawdopodobieństwo, iż w roku 2019 nadal będą one wzrastać. Nowa podaż osiągnie w roku 2019 rekordowo niski poziom, a ograniczona ilość nowych projektów w budowie oznaczać będzie, że dominującymi trendami na rynku będą przebudowy, modernizacje i rozbudowy istniejących aktywów.
The Prague prime high street has a unique position in the retail hierarchy. It has seen sustained rental growth over recent years and rental levels are forecast to continue rising. The industrial market benefits from booming e-commerce, and occupier demand is expected to remain strong this year
Erik Drukker, Country Head BNP Paribas Real Estate Czech Republic
The availability of labour and land as well as the rising costs of both construction and labour remain to be the key constraints on further significant expansion of this sector . Leasing activity concentrates around the Greater Prague area that traditionally takes the largest share of take-up; additionally, the Northern and Western regions benefit greatly from their proximity to Germany and the Western markets.
Romania – not only Bucharest
Solid demand for modern office stock in the main regional cities has fostered construction activity, which has resulted in both large deliveries of office projects in 2018 and a substantial pipeline for 2019. Take-up remains strong in the capital city, with annual gross volume reaching 290 000 square metres, of which approx. 45% was accounted for by pre-lets. Top regional cities, such as Cluj-Napoca, Timisoara, Iasi and Brasov, are starting to see renewals and relocations in addition to new entry operations. The modern retail stock in Romania has recorded a slight increase by approx. 100 000 square metres, 20% of which are represented by extensions of existing retail schemes.
Although economic growth in recent years was driven by private consumption, very few new retail schemes were completed. A couple of retail developers are targeting smaller cities with retail parks driven by chain anchor tenants from the food industry and shopping centres offering an attractive tenant mix of local and international brands
Olga Melihov, Country Head, BNP Paribas Real Estate Romania
The strong demand for modern industrial space has translated into an annual take-up of 570 000 square metres. In addition to traditional occupiers, the food retailers and e-commerce operators have contributed significantly to 2018 leasing activity. The revival of the industrial market has changed the routine of developers, who are ready to construct speculatively in addition to build-to-suit and pre-let units. The active developers will continue to strengthen their position on the local market either through development of new units or acquisition of well-leased and well-positioned industrial premises. The projected pipeline which has the potential to increase the modern Romanian industrial stock up to 4 million square metres will not put further pressure on rents, which are expected to remain stable for longer than the forecasted 12-month period.
