Dominant shopping centre schemes and prime big-box logistics emerged as investment choices for the expert panel at PropertyEU's recent CEE Investment Briefing.

Dominant shopping centre schemes and prime big-box logistics emerged as investment choices for the expert panel at PropertyEU's recent CEE Investment Briefing.

Asked how to deploy a fictional €500 mln allocation, panellist Michael Atwell, head of capital markets for CEE, said he would go for one large retail scheme in a big Polish city.

Atwell: 'We have seen such large transactions. Zlote Tarasy (ed - a shopping centre in central Warsaw) went for just under €500 mln and there are other big schemes that have come close to that. So, I would focus on one big, dominant scheme that will have a long sustainable future and will trade superbly.'

Ben Bannatyne, managing director for CEE at Prologis, said he would naturally opt for logistics real estate. He said there were opportunities to invest in big box, multi-tenanted logistics with short lease terms in the main five Polish markets and in capital cities in other CEE countries.

Bannatyne said he would also invest in very prime office assets in the capital cities. 'It would be multi-tenanted offices of 15,000-20,000 m2 in an asset-management play in locations that are never going to become secondary.'

David Brodersen, senior VP Portfolio Management Europe at US investor Heitman, made a strong pitch for diversification in terms of both assets and location. 'Instead of betting on a single big scheme our funds would typically want 20 assets,' he said. No single asset would take up more than 10% of the capital. Brodersen: 'That means that with €500 mln I couldn't afford an asset of much more than €100 mln as 10% of €500 mln is €50 mln and I would bring in €50 mln of debt.'

Brodersen cautioned that timing the market can be difficult. 'Everyone thinks they can get it right. Our track record in our third fund isn't stellar so I think I'd spread it around into multiple sectors and multiple assets in capital cities only.'

Turkey and Russia, Brodersen said, would have to receive 'healthy' allocations because of the GDP growth in these markets.