According to research by Savills an active fourth quarter in 2012 resulted in Poland's highest annual investment volume since 2006, at €2.7 billion representing an 8% year-on-year growth. Furthermore, with activity expected across all sectors the international real estate advisor forecasts €1 billion will be transacted in the Polish commercial property market during the first half of 2013.
The firm notes that almost 60% of transactions in 2012 were finalized in the fourth quarter. Of a total 42 deals completed 22 took place in Q4 2012, amounting to €1.645 billion and including nine transactions of over €100 million. Nonetheless, the largest transaction of the year took place in Q1, namely the acquisition by Axa Real Estate and CBRE Property Fund Central Europe LP of a 77% stake in Zlote Tarasy, a mixed-use complex in Warsaw for €475 million.
Michal Stepien, senior consultant in Savills Poland, comments: "Investors put a strong focus on prime assets in 2012, which was reflected in the highest average lot size recorded in the history of Polish commercial property investment market, at approximately €64m. Hence, despite a relatively low number of investment transactions in 2012 the volume was the highest since 2006."
Savills notes that traditionally the office and retail sectors dominate the Polish investment market, however in 2012 the warehouse sector's share of the total volume reached 17%, up from 6% in 2011. In all there were 11 investment transactions in this sector worth €436 million, up 200% compared with 2011 when seven transactions totaled €144 million. The firm expects to see continued interest in the warehouse sector in 2013, with prime warehouse yields currently at 7.75%.
In the office sector, Warsaw remains the key destination for investment with only one office property sold outside the Polish capital in 2012. Savills states that prime office yields in Warsaw CBD currently stand at 6.00%, and at 7.50% in prime, non-central Warsaw locations and expects these to remain stable. The retail sector dominated the investment volume in 2012, accounting for 43% of the annual investment volume (down from 46% 2011). Prime achievable shopping center yields will remain stable at approximately 5.60% in Warsaw, 6.00% in major regional cities and 7.50% in secondary cities.
Michal Cwiklinski, head of investment at Savills Poland, says: "After a strong finish to 2012 we anticipate the Poland investment market to maintain a stable level of activity in 2013 and forecast a year-end total of €2 to €2.3 billion. Looking ahead we expect to see sustained activity in the first half of 2013 with German funds still the leading investors in the prime end of the market. We are also seeing a lot of interest from international buyers in distressed assets and believe that Polish investors will play an increasing role buying both prime and opportunistic assets this year."