Polish full-year volumes for 2012 may reach EUR 2.5b: JLL

Polish real estate volumes for full-year 2012 may come to as much as EUR 2.5 bn despite a subdued second quarter, Jones Lang LaSalle has said.

The property adviser recorded EUR 877 mln of transactions in the first half, with over EUR 700 mln of that in Q1. The volume was down 6% on the first half of 2011 but John Duckworth, managing director of Poland/CEE at Jones Lang LaSalle said it was a strong performance relative to other markets in the CEE region. The Polish result amounted to about 70% of the total volume for the CEE.

The Czech Republic saw EUR 224 mln of transactions in H1, with volumes below EUR 100 mln in Romania and Hungary. No significant transactions were recorded in the other CEE markets. 'Poland is in the unusual position of being busy at the moment in contrast to a slackening in other CEE markets, and Italy and Spain in southern Europe,' Duckworth said.

He said there is still strong investor interest in Polish real estate and four major deals brokered by Jones Lang LaSalle have already been signed and, if completed in 2012, will drive up the volume for the market considerably.

In August a consortium comprising Allianz Real Estate and Tristan Capital Partners signed a preliminary agreement to acquire the Warsaw Financial Center (WFC) for about EUR 210 mln. Jones Lang LaSalle and Colliers acted for the vendors, CA Immo and Pramerica.

At end-July Hamburg-based Union Investment Real Estate, represented by Jones Lang LaSalle, said it was acquiring the Manufaktura shopping centre in Lodz in one of the largest shopping centre transactions of the year. The investment volume was not disclosed but market watchers have put it at EUR 350-400 mln. JLL said confidentially clauses prevented it from commenting on this market speculation on either of these deals.

Duckworth said, ‘If these and other deals in the market we are aware of involved with close we may not reach the 2011 volume of EUR 2.75 bn but we may get close to EUR 2.5 bn,' Duckworth said. 'It seems like the relatively positive conditions in Poland will continue for the foreseeable future, but a looming issue is that the foreseeable future has clearly shortened, especially when placed in context with the wider Euro zone difficulties to which Poland is not immune.'

Risk aversion is apparent across Europe and transactions are taking longer in many markets, including Poland. The majority of the transactions closed in the first half of 2012 were originated in 2011. 'We can ask whether all of the 2012 deals will close this year. There are a lot of drivers, such as the longer time needed for securing the debt finance by the buyers or taxation issues. Depending on the constraints vendors and buyers have to deal with we may see some slippage into 2013,' Duckworth said.