The volume of investment in commercial property in Poland exceeded €4bn last year, representing the second highest volume and the most active last quarter ever recorded.
Michal Cwiklinski, head of investment, Savills Poland, commented: “It has become almost a tradition in Poland that the last quarter of the year sees a surge of investment activity. The last quarter of 2015 was no exception, with the highest quarterly investment volume ever recorded.”
Research conducted by the international real estate advisor highlighted that the year-end result was boosted by two large share deals – the takeover of the majority stake in Echo Portfolio by Oaktree and PIMCO (managed by Griffin Real Estate) and the acquisition of some SPVs of Trigranit by TPG Real Estate.
Transactions in the retail sector were particularly dominant last year, accounting for around 55% of the total volume. Michal Cwiklinski added: “Investment activity in Europe has been rising, especially in the retail sector. The last quarter of 2015 confirmed that this trend is also a case in Poland, despite a shortage of decent investment product.”
These high levels of investment in the retail sector were a consequence of a few large transactions; notably the acquisition of Riviera Shopping Centre in Gdynia by Union Investment (for €291m), the acquisition of Stary Browar by Deutsche Wealth Asset Management for around €285m, and the acquisition of Karolinka and Pogoria Shopping Centres by Rockcastle for €221m.
In contrast the office market experienced decline, with Savills reporting that office transactions in 2015 amounted to around €1.3bn, almost 27% less than the year before. With significant supply entering the Warsaw market, putting rental levels under pressure, investors have moved towards exploring regional cities. More than half of the sector's volume last year accounted for office properties located outside Warsaw. Savills anticipates, however, that this year the volume of office transactions in Warsaw may outpace regional markets, as a few larger properties in Warsaw city centre may be transacted.
Skanska dominated office investment transactions in 2015 in regional cities: the portfolio of office properties in Krakow and Katowice for €160m sold to NIAM, Dominikanski Square in Wroclaw sold to Union Investment for around €117m and Green Horizon in Lodz sold to Griffin Real Estate for around €65m.
As far as yields were concerned, Savills registered that prime office yields have been sharpening across all property sectors with prime office and retail yields at around 5.5%, and prime warehouse yields at sub 7%, not taking into account the recent sale of Amazon facility, which was an extremely unique investment product, transacted at a significantly lower yield.
