Foreign investors make up 98% of Q1 Polish property volumes

Non-domestic investors accounted for 98% of the EUR 728 mln of real estate investment volume in the Polish market during the first three months of 2012. The total volume was up 21% on the same period in 2011, according to research by Savills.

The real estate adviser notes that US, Austrian, German and UK investors were the most important buyers in the first quarter of 2012. Given the strong start to the year, Savills expects year-end investment volumes in Poland to reach about EUR 2.5 bn, more or less matching the 2011 level.

The retail sector accounted for nearly 80% of the quarter’s total transaction volume, according to Savills data. The largest deal involved the mixed-use property Zlote Tarasy in central Warsaw, comprising 66,200 m² of retail and 47,300 m² of office space. Another significant retail transaction was the acquisition of 25,000 m² at Alfa Centrum in Olsztyn by Rockspring Property Investment Managers from Arka Property Funds for EUR 84 mln.

In terms of yields, Savills reports that prime office yields in Warsaw's CBD stand at 6- 6.25%, or 6.75% for prime offices in non-central locations, while major regional cities are currently at 7.5%. Industrial yields in Poland are running at 7.5 - 7.75% while in the retail sector prime yields have remained stable at 6% for shopping centres in major regional cities, with leading galleries in smaller cities standing at 7.00 - 7.50%. The firm expects prime yields in all sectors to remain stable in 2012.

Michal Cwiklinski, head of investment at Savills Poland, said: 'We have seen a strong start to 2012 with continued interest from foreign investors, particularly in retail assets. These international buyers are attracted to Poland’s above-average GDP growth and the country’s high consumer confidence, making it an appealing market to invest in, both in the capital as well as major regional cities.'