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Jones Lang LaSalle summarises investment transactions on the Polish commercial real estate market in 2012

Investment transaction volumes hit €2.75 billion, Poland remains the most active market in the CEE region in 2012

Warsaw, 17th January, 2013  - According to Jones Lang LaSalle’s analysis, total investment volumes on the Polish commercial real estate market in 2012 amounted to approximately €2.75 billion. This was on a par with the results from 2011 (approximately €2.75 billion as well), which was a very good year for the investment market, and is a considerable improvement on 2010 volumes (€1.98 billion). 76% of total transaction volumes in the CEE region fell to Poland. Investors (especially from Germany, USA and Great Britain) focused their attention particularly on prestigious office and retail projects. Warsaw remained especially popular as the city accounted for 55% of total transacted volumes. The largest investment transaction in 2012 was the sale of the Złote Tarasy office and retail complex in Warsaw for €475 billion.

In the previous two years, the commercial real estate market in Poland was characterised by a balanced growth, which resulted in a stable €2.75 billion transaction volumes recorded in 2011 and 2012. In terms of particular market segments, the transaction volumes for 2012 reached €1.08 billion on the office market (39.5% of the total volume), €1.07 billion on the retail market (39.0 %), €0.5 billion in the industrial segment (17.8%) and €0.1 billion in the hotel sector (3.7%). 2012 saw a total number of 17 transactions on the office market, 13 in the retail segment, and 10 – in the industrial area. Investors were mostly attracted by trophy assets in prime locations in Warsaw and first-tier regional cities.

Rafał Kosoń, Consultant, Capital Market Department, Jones Lang LaSalle, comments: "Institutional investors are attracted mostly by stable and safe assets located, in the case of the office sector, in Warsaw, especially in the city centre, and in the case of retail properties - in the major regional markets. The capital city’s share in the total transaction volume in 2012 amounted to more than 55%, and 4 out of 5 the major deals last year, concerned assets located in the most prestigious areas of Warsaw. In the industrial real estate area, investors continue to be attracted by new buildings in prime logistics locations, that are in close proximity to the largest agglomerations and have good access to the A1, A2 and A4 motorways. Other key investment drivers for industrial acquisitions are long-term lease contracts and occupiers of strong financial covenants. We also observe investors’ interest in higher risk assets – office buildings located outside Warsaw city center or in first-tier regional cities, dominant shopping centers in smaller cities as well as warehouse projects occupying less attractive logistics locations. It should be considered, however, that in the case of such assets, the purchaser usually expects a substantial price discount.”

The largest share in investment volumes in Poland in 2012 came from German investors, with American and British investors in second and third positions respectively. Polish capital's share in 2012 investment volumes amounted to slightly more than 5%.

Jones Lang LaSalle expect that the volume of commercial real estate market deals concluded in 2013 will be similar to the volumes recorded in the previous two years.
Poland the most active CEE market
"If one takes Russia out of the equation, Poland is the leading market in the CEE region in terms of investment activity and real estate assets liquidity. With €2.75 billion investment volumes it accounted for 76% of total transaction volumes recorded in the CEE in 2012. Outperforming other regional markets by such a margin is a result of the favourable macroeconomic situation, and continued stable condition of the banking sector, which is the major financing provider on the real estate market. Additionally, last year, Poland was named as the most transparent commercial real estate market in the CEE, coming close to Western European countries in respect of market transparency. This confirms that the Polish market is developing dynamically and by a growing number of institutional investors is perceived as a core market for their investment activity. We assume that Poland will consolidate its leading position in the CEE in 2013 and in subsequent years.” -Rafał Kosoń summarises.