According to Colliers International research, 30 transactions totaling EUR 1.5 bn were concluded on Poland’s commercial real estate market in H1 2017. This was the second best half year result during the last 9 years. Most active investors in Poland were funds located or managed from the US (29% market share), the United Kingdom (18%), Germany (16%) and the Republic of South Africa (13%).
Retail properties with best results
In H1 2017, investors were most active in the retail properties sector, where over EUR 900 m was invested (60% market share). The biggest transaction on this market was the acquisition of four IKEA retail parks for EUR 220 m by a fund managed by Pradera.
The hotel investment volume amounted to historical record of EUR 340 m and 23% market share. Five hotels (over 1,000 rooms) belonging to Warimpex were sold to U City in a transaction worth ca. EUR 120 m. This was the largest single investment transaction in the hotel sector in Poland. Another significant transaction was the acquisition of Sheraton hotel in Kraków by Invesco for EUR 70 m.
The office sector had 17% market share (EUR 260 m). No significant investment deals in the industrial sector were noted in H1 2017. However, Colliers International experts expect that the volume in this sector in 2017 will be high as several deals are at advanced negotiations stage.
Investors target regional cities
One of the most noticeable trends is the increase of regional markets in the investment volume. In H1 2017, EUR 900 m was invested in regional markets (61% market share), while EUR 600 m (39%) was allocated to Warsaw.
„Poland’s commercial real estate market is dynamically developing and has good prospects ahead. Against other CEE countries, Poland stands out with strong investment activity out of the capital city. The availability of young and skilled staff in regional markets attracts tenants from modern business services sector, the result of which is strong development activity in the office sector. In turn, investors positively view the stability and long-term growth perspective for these markets,” says Marcin Mędrzecki, Associate Director in the Investment Services department at Colliers International.
Kraków is Poland’s second biggest investment market after Warsaw, as well as biggest business services market in Central and Eastern Europe. Over the last 2.5 years, in the capital city of Lesser Poland there were 30 transactions concluded worth in total EUR 1.3 bn, EUR 950 m of which was invested in retail assets, whilst EUR 750 m was allocated to the office sector. The biggest transaction recorded there is the acquisition of Bonarka City Center shopping center by Rockcastle for over EUR 360 m in 2016.
Wrocław is the third biggest market by value of transactions concluded. Roughly EUR 600 m has been invested there since 2015. Apart from strong demand for retail and office assets, there is a strong interest in warehouse properties, largely due to the scale of development along the A4 motorway.
The interest of investors in Tricity has been observed since 2015, when Union Investment acquired Riviera shopping center in Gdynia for EUR 291 m, and when Reino Partners and Bluehouse bought the modern office building Alchemia I in Gdańsk. Over the last 2.5 years, EUR 670 m was invested in Tricity, EUR 290 m of which was allocated to the office market. Tricity stands out with, among others, its location and access to sea ports.
Since the beginning of 2009, investors have placed EUR 1.3 bn in the capital city of Greater Poland. Over 60% of transactions were concluded over the last 2.5 years. EUR 900 m (70% of capital invested there) was allocated to retail properties, particularly shopping centers with dominant position on the local market. The biggest transaction was the acquisition of Stary Browar by Deutsche Asset & Wealth Management for ca. EUR 285 m in 2016. One of the advantages of Poznań is the attractive location between Berlin and Warsaw.
Since the beginning of 2009, investors have allocated EUR 650 m to Łódź’s commercial real estate market. The most spectacular transaction on this market by far was the sale of Manufaktura shopping center to Union Investment for EUR 390 m in 2012. Among the biggest advantages of Łódź are convenient location in close proximity to A1 and A2 motorways, access to two international airports, as well as an extensive railway network.
The total investment volume on Katowice’s commercial real estate market has amounted to EUR 800 m since 2009. The biggest transaction on this market was the acquisition of Silesia City Center shopping mall by a consortium of investors, including Allianz and ECE, for EUR 412 m. Over the last 2.5 years, transactions worth EUR 115 m were concluded in Katowice. The benefits of Katowice include well-developed road and rail infrastructure. The city is well-connected with, among others, A1 and A4 motorways and is located in close vicinity to three international airports.