Cresa about the investment market in Poland
Who wants to invest on the commercial real estate market in Poland? And in what?
What is it actually like? Are investors interested in Polish office buildings and shopping centres, but there’s no appropriate investment product? Or have they rather put investments on hold, watching the Polish market and economy? Do the most conservative-minded investors still have faith in Poland? These questions are addressed by Jędrzej Suchowolec, Senior Advisor at Cresa Poland.
What are investors who want to spend money in Poland actually looking for?
Jędrzej Suchowolec, Senior Advisor, Cresa Poland: At the current stage of the market cycle the most sought-after investment products are office buildings in prime locations, not only in Warsaw, and retail schemes with dominant positions in their respective regions.
Is it expensive in Poland?
Poland has attractively-priced properties compared to Western Europe. In addition, the investment risk associated with prime real estate is acceptable even to the most conservative investors such as German pension funds. There is also a strong demand but a limited supply of top-quality assets. As a result, as many as several positively screened investors interested in acquisition participate in the second round of bidding for large commercial real estate. We expect real estate prices to hit new record highs in upcoming months.
But not everything that is up for grabs will find buyers.
Properties put on sale attract varied levels of interest. Due to low interest rates across Europe and availability of cheap money, leading to downward pressure on yields, investors need to choose schemes that offer an income growth potential in order to gain returns they are looking for. That’s why the most sought-after properties are those that can be extended or those where new tenants can be brought in to create an added value both to the client and the investor.
Secondary schemes with no growth potential attract the least interest and often cannot find buyers immediately after their delivery to the market.
