POLAND - Investors with "diametrically opposed" approaches to real estate are targeting Poland as a market that "has done everything right", according to IVG Immobilien.
In a report published this week, the German property fund manager claimed growth investors and cautious investors were both targeting a market based on macroeconomic key data and enlargement of the market outside Warsaw's central business district (CBD).
Thomas Beyerle, IVG head of research, said: "It's booming - but it's one of Europe's most stable markets."
He added that the "exotic investors" from the middle of the last decade had long gone.
Although an anticipated rental upswing next year, combined with a number of expected completions, will not necessarily increase the market's temperature, Beyerle said investors could avoid pressure by targeting regional markets rather than project developments in the capital.
Beyerle said he did not expect to see massive capital inflows into the regional office market, but that prices were likely to rise in Warsaw's cyclical CBD, which accounts for 34% of office stock.
Supply of Polish office will increase significantly in the country's second cities this year and next in response to demand from multinational subsidiaries and offshored business functions, according to the IVG report.
The business processing (BPO) sector accounts for around 300 companies, many of them located in Krakow and Wroclaw.
One influence on Warsaw property pricing is the domination of investment by overseas capital.
Despite having the EU's sixth-largest population, Poland has a relatively meagre domestic real estate investment market, not least because of restrictions on pension funds investing in property.
Following the limited success of reforms last August, another tranche of reforms currently in negotiation are focused on the country's retirement age and investment in overseas equities.
Bayerle's yesterday came after CBRE Global Investors chief economist Sabina Kalyan called into question the usefulness of 'CEE' as a geographical descriptor.
"It's about time we started talking about major and minor markets," she said. "Poland has emerged, as behooves the size of its economy."
Meanwhile, specialist Central and Eastern Europe property investor Ablon announced it had suspended all but one of its development projects in Poland until market conditions improve.
The listed company said it was seeking alternative financing for the Karolkowa Business Park, a CBD development.
The stalled projects comprise one residential project in Gdansk and a smaller office development in Warsaw.
