Poland commercial property investment hit a new record in 2019.
Commercial buyers spent €7.65 billion on Poland commercial property in 2019, up 6% year-on-year.
Wide availability, high investor demand and attractive rates of return all contributed to the record spend in Poland commercial property, says a new report from BNP Paribas Real Estate Poland.
Most investment came from Europe – particularly the UK and Germany. But Asian investment is increasing steadily and is now is to 20% of transaction volume. They typically require secure assets with long-term leases and stable yields.
Half of Poland commercial property investment on offices
Half of investment went on offices, with a total volume of 1.4 million square meters.
The capital, Warsaw, accounted for around 60% of total spend. Notable transactions included the Warsaw Spire A by Immofinanz for €386 million, Warsaw Financial Center by CPI PG for €275 million and Eurocentrum Office Complex also by CPI PG for €255 million.
Kraków and Wroclaw lead regional markets
Kraków and Wroclaw lead the regional markets in the size of assets. The largest volumes were generated by the acquisition of Argon in Gdańsk by ISOC Holding, Nowy Rynek in Poznań by Franklin Templeton Investments, Business Garden in Wrocław by ISOC Holding or also Globalworth’s purchase of the Podium Park complex in Kraków.
The retail property sector generated more than one-quarter of the value of all transactions (26%) worth €1.9 billion. Although this was down on the record in 2018, it was better than forecast. Investors were most interested in retail opportunities with solid foundations, guaranteeing a stable return on investment.
A significant share in the total volume of transactions in this segment concerned improved retail properties, who refreshed the offer or extended the tenant mix.
The appetite of investors for industrial and logistics properties in 2019 remained high, but availability was lower than in previous years, which translated into a lower transaction volume of about €1.45 billion. Facilities built for e-commerce operators were the most popular, with asset prices reaching record-highs.
Private student housing platforms saw increasing demand, including a transaction by Catella European Residential Fund, which purchased a project in Kraków consisting of apartments for rent and a student house from Hines for €20 million. However, the private student housing market is facing limited listings, which is muting sales.
In 2019, Kajima Student Housing and Griffin RE purchased the Student Depot private student housing platform for around €60 million from Oaktree Capital Management.
Despite a fall in availability, demand in the commercial real estate sector in Poland is set to remain strong in 2020, it is believed.