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News Release


Good beginning to the year for the investment market in Poland

The majority of 2013 transactions to date generated by the office and industrial sectors, according to Jones Lang LaSalle

Warsaw, 13 May 2013 - Jones Lang LaSalle has published its Warsaw City Report Q1 2013, with experts analysing the office, retail, industrial and residential sector in Poland's capital city, along with a broader national picture. Below are the key facts from the latest report, concerning the investment market in Poland after the first four months of 2013.
The period from January to the end of April of 2013 in Poland came in strong with an investment volume of €748 million. So far, the office sector has the largest share 2013 transactions (€424 million), followed by industrial (€184 million) and retail (€126 million), with the hotel sector rounding things off with €14 million. In terms of the number of transactions, 2013 outpaced the same period in 2012 with 70% more transactions (17 deals in 2013 versus 10 closed in the corresponding period last year).

Office sector deals were dominated by Hines’ acquisition of New City (Warsaw, Mokotów) from ECI at a price of €127 million, RREEF's purchase of Green Corner (Warsaw, City Centre) from Skanska, and a Polish institution buying Green Towers (Wrocław), also from Skanska. One other large transaction worth noting is the acquisition of the Holland Park mixed use scheme (Warsaw, City Centre) by Kulczyk Silverstein Properties for a reported price € 50 million. These four transactions accounted for over 77% of the total office investment volume.

Tomasz Puch, Head of Office & Industrial Investment, Jones Lang LaSalle, comments: “The sale of New City in Warsaw (Mokotów) and Green Towers in Wrocław illustrates increasing liquidity in the Warsaw sub-markets and other major cities in Poland, that had up until recently suffered from limited investor interest. Looking at the latest office transactions alongside deal terms agreed, we expect this trend to continue and interest to grow, which will in turn prompt an increase in prices”.
Retail investment volumes came in low with only two major transactions, namely the 32,500 sq m Galeria Leszno, acquired by Blackstone, and, most recently (in April 2013), London & Cambridge Properties purchasing three shopping centres located in Radom, Tarnów and Piotrków Trybunalski from Echo Investment for €67.1 million, driving retail investment volumes to over €126 million.
Industrial investment has seen a strong beginning to the year with Prologis trading to Norges across Europe (including Poland) while Segro acquired Żerań Park II from AREA Property Partners / Apollo Rida Poland in April for a reported price €43.2 million.
"With other significant transactions in the pipeline, we envisage industrial investment volumes for 2013 to come in close to 2012's record . What should be noted is that the volume of a single transaction will still be important, and from the investors’ point of view should not be lower than 20 million euros. The two-tier market will continue, with active core investors maintaining prime yields in all sectors and those investors seeking riskier assets which offer a higher rate of return”, Tomasz Puch adds.
According to Jones Lang LaSalle, prime office yields are expected to remain stable at around 6.25%, retail yields for best to trade product at around 5.75% and truly prime (for long leased assets) warehouse yields at below 8.0%. Company’ experts forecast prime yields for all sectors to remain stable in the short term. The yield gap between prime and secondary products is 100 to 250 bps and Jones Lang LaSalle expects this spread to continue, or widen further.