Decline in value of investment transactions

Colliers International sums up the first six months of 2015 on the investment market in Poland. The total value of investment transactions recorded 40 per cent decline in comparison to analogical period in 2014.

The total value of investment transactions realized in the first six months of 2015 amounted to ca. 810 million EUR which indicates 40 per cent decline in comparison to the first half of the previous year. As the main reason of decline in transactions' value Colliers points out a smaller number of properties put up for sales meeting expectations of institutional investors in comparison to last year.

 

Return rates

 

In the case of the best property assets – including offices and logistic centers – return rates are determined by duration of lease contracts. Considering modern office buildings, they total from ca. 6 per cent in Central Business Area in Warsaw to ca. 7.75 per cent in Mokotów and Służewiec. The return rates decreased below 7 per cent in the largest regional cities such as Wrocław and Cracow.

 

Volume of transactions 

 

Over 20 transactions were realized in the first half of the year. The average value of one of them was lower in comparison to the analogical period last year. It is related to limited availability for sale of big properties. The dominant sector turned out to be office market with 49 per cent share in the market mainly due to transactions such as Green Horizon (ca. 65 million EUR), Enterprise Park (ca. 65 million EUR) and Europlex (ca. 61 million EUR).

 

Description of transactions  

 

The biggest transactions on the office property market are sale of Green Horizon office by Skanska for Griffin Real Estate and sale of Enterprise Park office complex by Avestus Real Estate for Tristan Capital Partners.

 

The new investor on the Polish office property market who finalized a purchase transaction of the property is Lonestar. It purchased Europlex office building in Warsaw. One of the most important transactions was takeover of shares in Echo Investment SA – one of the most reputable developer companies in Poland – by Griffin Real Estate/Oaktree and PIMCO.

 

Forecasts

 

Transactions of the commercial property market with the total value of over 1.5 billion EUR are currently in the stage of due diligence and we are expecting that they will be finalized till the end of this year. Therefore, the value of transactions in 2015 will be close to the level from 2014 – explains Piotr Mirowski, Partner and Chairman of Polish Department of Investment Services in Colliers International. Poland is one of the most developed and liquid markets of the Central and Eastern Europe region. The number of purchasers and diversity of capital flowing to the country are still increasing which contributes to increasing competitiveness among investors and pressing for increased prices of properties – adds.  

 

The full report in Polish is available below.  

 

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