Banks prefer to finance new development projects rather than existing assets in Poland, according to a study carried out by accountancy firm KPMG. In Austria and Slovakia, lenders are equally open to financing either development or existing assets, the findings show.
Banks prefer to finance new development projects rather than existing assets in Poland, according to a study carried out by accountancy firm KPMG. In Austria and Slovakia, lenders are equally open to financing either development or existing assets, the findings show.
The situation in these three markets differs from other Central and Eastern European markets where lenders have a clear preference for income-producing properties. This is most pronounced in the Czech Republic and Romania, according to KPMG’s CEE Property Lending Barometer 2011. The study is based on interviews with 50 domestic and cross-border lenders active in the region.
Although banks generally have a preference for financing income-generating assets, their willingness to fund development has risen significantly in comparison to 2010, KPMG said. Financing new development is preferred in Poland because it is a more mature and liquid market than its neighbours, and therefore has the potential to generate higher returns.
In mid-November developer Plaza Centers opened its 10th shopping centre in Poland. Days earlier Polish real estate company Griffin said it was teaming up with Belgium's Immobel to buy a portfolio of seven land plots across Poland in what is said to be one of 2011's largest property deals in the country.
Hungarian developer Trigranit has several projects in Poland. In September the company broke ground on its EUR 160 mln development project in Poznan. Phase I of the Poznañ Glówny project involving the construction of the 5,500-m2 railway station is due for completion in May 2012, in time for the European Football Championships.
Trigranit is also in the construction phase for the 140,000 m2 Poznan City Centre scheme. Last June, the company completed the first phase of a 50,000 m2 office project in Krakow.
Futureal, another Hungarian developer, recently obtained EUR 50 mln in financing for its Nova Park shopping centre development joint venture in Poland.
KPMG's Lending Barometer shows preferred asset types for lending vary from country to country. The office sector is preferred in Poland, the Czech Republic and Romania, while retail is the asset class of choice in Hungary and Serbia.
Banks in Austria are equally interested in financing office, retail and logistics projects.
