When it comes to investing in the Polish property sector fortune favours the brave, Przemyslaw Krych, founder and CEO of Griffin Real Estate, told PropertyEU at a recent Investment Briefing in Warsaw. Investors who do their homework but are also prepared to take risks reap rich rewards, he told the briefing.
‘The CEE market is very dynamic, which makes it very attractive,’ he said. ‘It is not overwhelmed with capital so it is possible to find many opportunities which you cannot find elsewhere in Europe. That is why we are committed to this market and we are going to grow.'
Griffin Real Estate, which has €4 bn in AUM, has been bringing serious foreign investors to the region: last year it was responsible for US giant Pimco’s first-ever venture in CEE, the acquisition of a majority stake in Echo Investment, which was one of the biggest real estate transactions ever realised in Poland.
This year the company brought Redefine Properties, one of South Africa’s largest REITs, listed on the Johannesburg Stock Exchange, to make its first investment in Poland, buying a majority stake in Echo Prime Properties, a newly established holding company which controls the office and retail portfolio of Echo Investment.
Game changer
Redefine’s executive chairman Marc Wainer described the deal as ‘a game changer’ for the South African company and said he had been attracted by the pipeline of new projects worth over €500 mln. Together Griffin and Redefine are planning to create the largest Polish REIT.
‘We took our time to understand the deal in detail and that is why we were successful,’ Krych said. ‘We had four offers but Redefine’s was the best not just in terms of price but because it was a meeting of minds. We share the same objectives and that is why we have a happy relationship.’
Now, he said, Griffin RE has made the transition from being an opportunistic investor, looking at asset by asset, to being a platform investor. He explained how he has combined three different businesses – a high- yielding portfolio, a commercial developer and a residential developer, into one single successful platform investor that focuses on the region.
As well as Echo Investment, which is the largest development platform in Poland, Griffin RE now also has a non-banking lending institution, the largest student housing REIT, Student Depot, a student housing network, and has raised capital to start a residential rental REIT.
Krych’s plan is to list ‘within a few months’ on one Stock Exchange outside of Europe and on Stock Exchange in Europe, but not Warsaw. ‘There is no legal framework yet and the market is very shallow, - he explained. – But if circumstances were to change, we would be happy to consider a third listing in Warsaw.’
