Jones Lang LaSalle has released two research papers: the latest issue of "Capital Markets Bulletin" on the investment market in Poland in 2011 and the "Warsaw City Report, 4Q 2011". The key findings of the reports, referring to the investment market in Poland are presented below.
2011 closed with over 2.5 billion of transactions across all sectors the highest since 2007. It represents a 28% y-o-y increase and over three and a half times that on 2009. At the same time it confirmed that the investor sentiment for Poland continued to be very positive throught the entire 2011.
The biggest share in the total volume of transactions fell on retail (1.2 billion), followed by office (1.15 billion), industrial (above 100 mln) and hotel (approximately 76 mln) sectors.
The total office investment volume in 2011 was the highest since 2006 and the top four office transactions included North Gate, Focus, Park Postêpu and Miasteczko TP. They also accounted for over 40% of the office volume. In addition, the acquisition of the Europolis portfolio by CA Immo had a big impact on the 2011 office investment volume. All but one office investment transactions closed in 2011 took place in Warsaw -the exception was Green Office in Kraków, acquired in December from Buma by Azora Europe.
The most notable Q4 office deals included the acquisition of Mokotowska Square by DEKA, the acquisition of Atrium International Business Centre (approximately 41 million), sale of Moniuszki Tower to Catalyst Capital and the purchase of M³odziejowski Palace by IVG (22.4 million). Other smaller Warsaw office deals encompass the sales of the Canal+ and N21 office buildings. Q4 also witnessed the closure of one significant office development deal: the forward purchase of Miasteczko TP by Qatar Holding. The only significant office transaction reported outside Warsaw was the purchase of the Green Office A & B buildings in Kraków by Azora Europe.
Volume-wise, the activity in the retail sector in 2011 was very similar to the office sector, in fact, marginally higher. Similarly to the office sector, the top three acquisitions (Promenada, Magnolia Park and Galeria Mokotów) accounted for over 52% of the volume and the following top three deals (DTC, Galeria Pestka and Wzorcownia) accounted for a further 18%.
Acquisitions of shopping centers: Wzorcownia in W³oc³awek, Galeria Pestka in Poznañ and Molo in Szczecin coupled with other smaller transactions such as the sale of Echo Pabianice indicate that investor demand for retail was not limited to major cities but, the good quality product located in secondary and tertiary locations was also on investors' radar.
The industrial sector also remained busy, however traded at a relatively low volume when compared to previous years. The total volume exceeded 20 million figure in two transactions and included the sale of the Intermarche warehouse in Mys³owice.
2011 also saw a number of more sophisticated transactions such as JV partnerships (e.g. Resolution in the SuperSam deal in Katowice) or forward funding deals (e.g. Qatar Holding in the Miasteczko TP deal in Warsaw), as well as a number of preliminary contracts signed across all sectors with the volume of these transactions exceeding 250 million. These deals are expected to close in Q1 2012.
Tomasz Trzós³o, Head of Capital Markets at Jones Lang LaSalle CEE/Poland comments: "We estimate prime office yields to be at 6.25%, retail yields at 6.00% and warehouse yields around 8.00% at the end of Q4 2011. We forecast prime yields to remain stable in the short term, but this would highly depend on how the situation in Eurozone evolves in the coming months. The yield gap between prime and secondary products is 100 to 200 bps and we expect this trend to continue."