Total property investment volumes in Poland reached 945 million in H1 2010 which, according Savills, is 50% up on the same period last year. In addition, the international real estate advisor expects the increased investor appetite to continue, predicting a year end investment figure for the country in excess of 2 billion.
Savills latest Poland investment bulletin states that the office sector has continued to dominate investor demand accounting for two-thirds of transactions completed in H110, which includes the sale of Horizon Plaza for 102 million to Union Investment and Harmony Office Centre sold to CommerzReal for 54 million. Interestingly there has been a significant increase in transactions on warehouse properties, which total 225 for H110 against 50 million in H109.
In comparison, the retail sector has experienced substantially lower activity than previous years accounting for just 11% of total volume in H110. However, Savills predicts that the retail sector's share of total investment volume will return to the usual 50% level following the completion of Simon Ivanhoe's assets in Arkadia and Wilenska, as well as several other deals expected in major regional cities.
Brian Burgess, Managing Director of Savills Poland, comments: "Overall, investors in Poland are seeking prime assets in the main cities, preferably Warsaw, with offices at the top of their agenda. However, due to a decreased development pipeline, there will be a shortage of good quality office buildings over the next 12 months and we therefore expect to see investors focus their attention more on the retail and warehouse sectors."
When assessing demand, Savills confirms that the most active investors were found in Austria, Germany, UK and France, which collectively accounted for approximately 90% of total H110 volume. The firm also notes that there is a continued resurgence of interest from UK private and equity investors.
Prime investment yields have remained stable with Savills reporting that prime office yields in Warsaw are at 6.75% in the Central Business District (CBD) and 7% to 7.25% in non-central locations. Prime shopping center yields in Warsaw currently range between 6.25% and 6.50%.
Eri Mitsostergiou of Savills European research says: "We expect that the next trend for yields is compression however the timing and speed for this is dependent on the stability of the capital and financial markets and, in particular, the lack of further large-scale turbulence in the European economies."