In a transaction that underscores the resilience of Poland's prime office market, Madison International Realty and Cavatina Holding have successfully closed a €61m refinancing for Chmielna 89, Warsaw's distinctive crystal-shaped office tower. The deal, arranged through Santander as underwriter and agent, with Bank Pekao S.A. as cooperation partner, demonstrates continued institutional appetite for best-in-class Polish commercial real estate despite broader market headwinds.
The 14-storey, 25,000 m² grade A office building has achieved over 95% occupancy with one of Poland's largest financial institutions on a long-term lease, providing investors with the kind of income certainty that has become increasingly valuable in today's volatile market environment. Completed in 2020, the BREEAM 'Excellent' certified building sits strategically between Chmielna Street and Aleje Jerozolimskie, Warsaw's main east-west artery.
"Since its completion in 2020, Chmielna 89 has firmly established itself as one of the leading assets in Warsaw's office market. This refinancing, with two blue-chip lenders that are both new to the project, is a testament to the unique quality of this property and the income it generates and highlights the confidence of the debt markets in best-in-class Polish offices," commented Andrew Brown, Vice President at Madison International Realty.
What makes this transaction particularly noteworthy for investors is the timing, as it comes amid a broader recalibration of office valuations across Central and Eastern Europe. The successful refinancing with new lenders suggests that trophy assets with strong tenant covenants and prime locations continue to command institutional interest, potentially indicating a flight to quality that could benefit similar assets across the region.
Daniel Draga, Vice President of the Management Board at Cavatina Holding, emphasised the strategic importance of the asset: "Chmielna 89 is a flagship project in our portfolio, showcasing Cavatina's commitment to delivering high-quality, sustainable and architecturally distinctive office buildings. This refinancing underscores the strong fundamentals of the property, the trust of leading financial institutions, and our ability to create long-term value for our partners and tenants."
The transaction was supported by a comprehensive advisory team, with Greenberg Traurig acting as legal advisor to the joint venture, whilst CMS provided legal counsel to the lenders alongside CBRE as valuer and Gleeds as technical advisor. Madison International Realty, which has been active in Poland since 2018, continues to demonstrate conviction across various asset classes in the market.
People mentioned:
- Andrew Brown, Vice President, Madison International Realty
- Daniel Draga, Vice President of the Management Board, Cavatina Holding
Companies mentioned:
- Madison International Realty (liquidity provider to real estate investors)
- Cavatina Holding (Polish real estate developer)
- Santander (underwriter, lender and agent)
- Bank Pekao S.A. (cooperation partner)
- Greenberg Traurig (legal advisor to JV)
- CMS (legal advisor to lenders)
- CBRE (valuer)
- Gleeds (technical advisor)
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