Swedish developer Skanska sold a record nine properties in Central and Eastern Europe (CEE) in 2014 amid signs that the recovery is sparking growing interest from international investors.
Swedish developer Skanska sold a record nine properties in Central and Eastern Europe (CEE) in 2014 amid signs that the recovery is sparking growing interest from international investors.
Skanska’s disposals in CEE accounted for more than 50% of its office transactions worldwide in 2014, while the total transaction volume reached a record level of €330 mln.
The nine buildings in seven office complexes were purchased by funds from Germany, the UK and US as well as local financial institutions based in Poland, the Czech Republic and Hungary.
Nicklas Lindberg, president at Skanska Commercial Development, the company’s CEE base, said: ‘We recognise great potential for further growth in countries such as the Czech Republic, Romania, Hungary and, of course, Poland.’
Figures from leading industry analysts indicate that investment in Central and Eastern European real estate swelled by 27% in 2014, and the trend is expected to continue in the current year.
According to figures from brokerage firm JLL, the total transaction volume increased to €7.9 bn from €6.2 bn in 2013.
Poland dominates
Poland dominated the regional market, accounting for 41% of all spending, followed by the Czech Republic (25%), Romania (16%), Slovakia (8%) and Hungary (7%).
The Polish office sector attracted record levels of investor interest with more than €440 mln of transactions, five times the total transactional volume in these markets for the previous five years. Warehouse transactions amounted to €744 mln, also a record, while €570 mln was spent on retail.
Troy Javaher, head of capital markets CEE at JLL, said: ‘Poland continues to perform exceptionally well and remains the primary focus for many institutional investors, but the other CEE countries have all significantly increased their trading volumes, which is a positive trend for the region as a whole.
‘Moreover, the investment activity in these re-emerging markets was well-balanced, with deals across all sectors and sizes.’
CBRE, which registered a total investment volume of €7.7 bn across CEE last year, said the region was dominated by the Polish market, which accounted for 43% of all deals.
Regional expansion
Skanska has expanded its operations beyond Warsaw to regional cities such as Lodz, and has lined up five office complexes for sale in 2015 in Kraków, Poznañ, Katowice, Prague and Bucharest.
The company began 2015 by acquiring the Five! Development scheme in Prague, a 14,500 m2 property in the Andìl-Smíchov commercial district, from German group Hochtief for an undisclosed amount.
In November, CEE-focused investor Griffin Real Estate acquired Skanska's Green Horizon office complex in the Polish city of Lodz for SEK 600 mln (€66 mln).
Separately, Skanska sold an office project in Kraków for €29 mln to Polish fund Reino Dywidenda FIZ while in Wroclaw it completed the sale of the Dominikanski office building to German fund manager Union Investment for around SEK 1 bn (€117 mln).
Adrian Karczewicz, transaction director at Skanska CDE, said: ‘In 2015, we are planning to deepen our relationships with financial institutions from Europe and the US, as well as the Middle East and Asia. We will, of course, continue our successful cooperation with regional funds which are becoming increasingly active in the CEE.’