Poland is expected to see record levels of real estate investment in 2016, with property adviser Savills forecasting over €4 bn of transactions by year-end.
Around 20 investment transactions with a total volume of €504 mln were closed in Poland in the first quarter of the year, which also saw two significant preliminary agreements being signed. South African investor Redefine Properties has agreed to buy a 75% interest in Echo Prime Properties, an Echo Investment subsidiary, which owns 18 commercial income-producing assets, with a total value of €1.18 bn.
This volume makes it the largest real estate transaction in the history of the Polish market.
Another notable preliminary agreement was signed in Q1 2016 was the sale of the Prime Corporate Center (new Raiffeisen HQ in Warsaw) by Golub GetHouse to Warburg-HiH, which has set a record low yield level. Both of these are due to be finalised in Q2-Q3 2016.
'The investment sentiment in Europe may be described as 'cautious optimism', nevertheless, the cross border capital flow and pricing in Poland is still on the rise. Core European capital is now even more targeted towards prime assets, driving prices up into record levels, and with other landmark office developments due to complete this year, Warsaw may see a strong recovery, compared to a relatively weak performance last year,' said Michal Cwiklinski, head of investment in Poland.
Prime yields have been sharpening across all property sectors with prime office yields well below 5.50%, prime shopping centres yields at 5.50% and prime warehouse yields at sub 7.00%, not taking into account such assets as Amazon facilities, which were extremely unique investment products, transacted at an even much lower yield.
Office assets are expected to account for up to 50% of the total volume, boosted by sales of a few prime office buildings in Warsaw, and a decent number of transactions in regional office markets.
