Investment activity in Polish real estate recorded only in office and retail sectors (PL)

CB Richard Ellis issues its Accumulator, Investment Market in Poland, 1H 2009, covering all aspects of investment market in Poland and its future trends. The economy downturn has a negative influence on the condition of real estate market. The stagnation on the investment markets started in 2008 has continued in the first half of 2009.

In this period, the total volume reached only EUR 118 mln. from eight deals. This represents a 90% decrease comparing to H1 2008. The average transaction amounted to about EUR 15 million.

The office and retail sectors continue to dominate the investment market, although share of retail transactions is lower. Since the beginning of the year there were only five retail transactions for a total of EUR 40 million and three office transactions, registered only in Warsaw, totalling EUR 78 mln. So far in 2009 there were no transactions registered in hotel and industrial sectors.

Open and closed-ended funds were the major buyers this year with Arka BZ WBK and Deka being the most active. The majority of the invested funds came from Germany; however Polish and UK investors closed more than one deal each.

'The current unfavorable situation in the investment market is expected to improve towards the end of current year. As vendors' price expectations start to reduce in order to adjust to purchasers' capability and demand, the market may speed up towards last months of the year.' – said Joanna Mroczek, Director of Research and Consultancy department at CB Richard Ellis.

The decompression of yields is still an observed trend. Prime office yields in Warsaw would be estimated from 6.75 to 7.00%. Prime retail yields have increased and currently are estimated at around 7.00%. Industrial yields are estimated at 8.75 – 9.00%.

Source: CBRE

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