M7 Real Estate has spent €45 mln on three office properties in Warsaw, Wroclaw and Katowice on behalf of its €120 mln dedicated Polish fund, underscoring the investment firm’s confidence in the eastern European market.
M7’s €120 mln Polish Active Fund (M7 POLAF) is set to be fully deployed in Poland by May this year, in the capital city, Warsaw, and the Wroclaw–Krakow corridor. Capital expenditure improvements, lease re-gears, tenant extensions and leasing up of vacant space are all on the menu for M7’s newest additions.
PropertyEU understands the relative absence of domestic capital in Poland compared to neighbouring markets, as well as the strength and size of Poland’s occupational market, and the potential for CapEx investment make for attractive investment opportunities.
The first tranche of assets provide a total of 33,417 m2 of office space, which is 91% let to over 45 tenants and provides a strong and diversified cashflow, with various opportunities to add value through active asset management initiatives.
M7’s latest purchases will be added to the company’s existing Polish portfolio, which it has been developing since 2014 and which has grown to around €80 mln of assets under management.
Properties already in the portfolio include a modern multi-let business park with seven buildings in Katowice, southern Poland, a high quality multi-let boutique office building in Wroclaw city centre, western Poland, and a multi-let, seven-storey office building in Warsaw.
Katarzyna Parkot, managing director of Poland at M7, said: 'This is M7’s first fund dedicated solely to Poland and these acquisitions mark the first step in our ambition to assemble a high quality portfolio of office and light industrial assets in supply constrained markets, which offer positive rental growth potential and scope to add value. We are also in advanced stages on a strong pipeline of additional investments as we continue to deploy capital on behalf of the Fund.'
Paul Betts, head of Central Europe at M7, commented: 'We continue to experience strong demand for Polish commercial real estate from a range of investors attracted by the market’s strong fundamentals. The assets we have secured complement each other well and provide the balance of immediate income with some exciting opportunities to add value. We look forward to announcing further acquisitions in due course.'
