Warsaw tops 'where to spend it' poll for CEE

Central Warsaw emerged as the preferred location for real estate investment in Central and Eastern Europe (CEE) during PropertyEU's CEE Investment briefing in early September.

Three of the four panellists cited the Polish capital when asked how they would invest a notional EUR 500 mln.

The findings reflect the reality on the ground. Poland attracted some 70% of CEE real estate investment in the first half of 2012. The largest transaction involved CBRE Global Investors and AXA Real Estate acquiring a 77% stake in the Zlote Tarasy mixed-use scheme next to Warsaw's central train station for EUR 475 mln.

Panellist Yann Guen, vice-president of retail developer Mayland Real Estate, said that he would use the EUR 500 mln to buy shopping centres in the centre of the Polish capital, or at the first exit of the new highway in the city. 'The problem is to try and guess what the next trend in retail will be; what kind of tenants and scheme will be the next new thing,' Guen told the 100-strong audience at the investment briefing.

Walter Hampel, managing director of real estate finance for CEE at Deutsche Pfandbriefbank, said he would spend EUR 300 mln in Poland. 'This would be a combination of Warsaw offices, retail across the country and logistics with operators who have a strong a customer base like P3, ProLogis, Panattoni,' he said. Hampel said he would spend a further EUR 50-100 mln in the Czech Republic and 'take a bet' on Budapest offices with another EUR 50 mln.

The remaining EUR 50 mln, he said, would be invested unleveraged in Moscow. "I would personally buy unleveraged in Moscow,' Hampel said, while acknowledging that finance is available in the market from local Russian banks.

Michael Atwell, head of CEE capital markets, and Daniel Harris, managing director for Europe & CE at Tristan Capital Partners, also said they would look to invest in the Warsaw office sector because of its 'long-term stable and secure' profile.

Tristan's Harris added jokingly: 'Having just bought the Warsaw Financial Centre (with Allianz Real Estate) I would probably buy the other remaining office buildings in CBD to try to create a monopoly. Then we can really see how far we can push rents in Warsaw.'

Selective investment in regional retail was also suggested by Atwell. 'There are great opportunities there but you have to be very selective city by city and town by town. Some cities are massively over-developed but there are opportunities to create the dominant scheme.'

Craig Maguire, managing director of logistics group Point Park Properties Poland/Romania, said he would look at the key corridors in Poland, the Czech Republic and Slovakia to create an integrated network of logistics parks. 'That would allow me to offer customers the same lease in Poland, the Czech Republic and Slovakia, subject to local laws.'

The full report from the CEE investment briefing appears in the October edition of PropertyEU Magazine.

Click on the link below to read: 'Griffin Group acquires market hall project in Warsaw'