The first half of the year 2013 was characterised by the highest activity of Polish investors since the commercial properties investment market was established in Poland. They have therefore moved into third place, after only the German and American investors, says the latest report by Cushman & Wakefield -„Marketbeat Polska – Autumn 2013”. The investment market has become dominated by office properties.
The activity in all the sectors of commercial properties remains high despite of the market going into a new cycle, and the predicted economic revival in Poland will steadily influence the rise in renters' activity. Because of the fluent and attractive rates compared to many other important European cities, the investment market in Warsaw attracts an increasing number of investors - says Charles Taylor, Managing Partner for the Polish branch of Cushman & Wakefield real estates services.
The value of investment transactions in this year's first six months reached around 1,09bn Euro, which means a yearly rise of about 16 per cent. Office properties comprised 60 per cent of the transaction's value, which was more than the value for commercial properties (23 per cent) and industrial and storage properties (16 per cent). Polish investors reached a record share level of 17 per cent, acquiring properties with a total value of around 192 mln Euro. The biggest share in the total volume of transaction belongs to German and American investors, comprising 50 per cent of the market. The biggest transaction in the given period was the sale of New City and NC2 office buildings by ECI partnership for 127 mln Euro to Hines Global REIT fund.
Polish subjects acquiring properties with a total value of around 192mln Euro gained a record-breaking share of over 17 per cent of the market, becoming the third biggest buyers group - comments Wojciech Pisz, President of Capital Market Group from Cushman & Wakefield. The stronger position of local investors should impact positively on the stability of our market and generate an additional demand incentive among its other participants. However, it needs to be stressed, that during the first half of the year all the investors were very active. The following months may be just as successful. It is shown by the large number of contracts signed in the third quarter of this year as well as contingent contracts, with a total value of around 1,2 bn Euro. The high demand and supply of new properties expected in the years 2014-2015 should create a high volume of turnover on the Polish investment market also in the following years.
The report states, that the volume of modern office spaces in the capital exceeded 4mln square metre, while the supply is growing faster than absorption, which results in more pressure on rent. The biggest passed on investment was Construction Business Center of 48 300 square metres, owned by HB Reavis. By the end of 2015, a supply at a level of 500 000 square metres is forecast. The volume of lease transaction has also increased in Warsaw, and reached 339 900 square metres. The biggest transaction of the first six months was the lease of a space in Ochota Office Park (13 000 square metres) taken by The Registry Office for Phaumacertical, Medicinal and Biocidal Products.
A rise in the number of vacant properties has been noted in the whole country. An exception in this aspect is Cracow, where the value of vacant spaces fell to 2,7 per cent. The biggest regional markets are still Cracow and Wroclaw. However, the amount of space has risen the most for Tricity (51 000 square metres). It is worth paying attention to the Sky Tower project in Wroclaw, which has enriched the market by 28 000 square metres, 12 000 square metres of which have been taken by Getin Group partnerships.
Higher activity on the lease market is created by lessees searching for ways to reduce the operational costs and the expiration of contracts signed in the years 2007-2008. New tower blocks will soon appear in Warsaw, like the tower in the Warsaw Spire complex owned by Ghelamco (around 60 000 square metres) or the Q22 office block owned by Echo Investment corporation (around 50 000 square metres). Because the supply of office space in Warsaw is growing much faster that its absorption, the number of vacant properties increases, which causes more pressure on rent rates. We can also see in the Capital, that most often lessees choose to sign the contracts for cheaper locations, outside the centre - explains Richard Aboo, Partner and President of Office Space Department in Cushman & Wakefield corporation.
A full version of the report in PDF format is accessible below.Download PDF