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| €3.3 billion invested in Polish commercial real estate in 2013, Savills says According to Savills latest Poland investment market report, strong investment activity in 2013 resulted in a total annual investment volume of €3.3 billion, the highest level recorded since 2006 and approximately 21% above the 2012 total. The firm expects activity will remain strong in 2014 and forecasts that by year end the total investment turnover will achieve a similar level to 2013, reaching approximately €2.9 to €3.3 billion. The international real estate advisor finds the retail sector dominated Polish investment in 2013 with a 43% share in total volume, followed by offices (36%) and the industrial sector (18%). The remaining 3% was accounted for by hotel transactions. In terms of investor origin Savills finds notes that overseas buyers continue to dominate activity. Michal Cwiklinski, director of investment at Savills Poland, says: "Cross-border investments accounted for over 90% of last year's investment volume with German and Austrian investors responsible for more than half of overseas investment." Savills reports that investor interest continues to be mostly focused on prime assets, particularly leading regional shopping centres. In terms of office properties, Warsaw City Centre was the most sought after location in 2013, accounting for 17% of investment volume, however investors have shown renewed appetite for regional office markets with the investment share of these markets increasing from 1% to 6% year-on-year. Mark Freeman, director of valuation & consultancy at Savills Poland, comments: "Investor interest in the leading regional office markets is growing. They are attracted by the rapid growth of the Business Process Outsourcing (BPO), Shared Service Centre (SSC) and IT sectors in Poland, which are among the major drivers of occupier demand." Savills has also observed strong activity in the industrial sector, where more than €600 million was invested in 2013. Apart from portfolio deals, which were dominant in this period, investors are increasingly interested in single-let projects with long-term leases. In terms of yields, the firm notes that prime yields remain stable with prime office yields in Warsaw recorded at 6% and between 7.50% and 7.75% for prime offices in the most established regional office markets such as Wroclaw, Krakow, Tricity and Poznan. Prime shopping centre yields stand at 5.75% for the best Warsaw assets and at approximately 6% for the best regional shopping centres. In the warehouse sector prime yields are were shown to be 7.50% for prime, single-tenant modern assets let to strong covenants, moving out to 8.25% for multi-let prime properties. Going forward Savills believes the investment market in Poland will see sustained levels of activity during 2014 with the office sector accounting for the greatest investment share at between 50-60%, approximately €1.66 billion (compared to circa 36% in 2013). The firm also expects to see continued investor interest in the warehouse sector, with portfolio deals and single tenant properties dominating market share. Michal Stepien, research consultant at Savills Poland, adds: "We expect the office sector to play a significant role this year, with an increasing share of activity directed towards regional markets and recovering activity in Warsaw's non-central locations, Mokotów district in particular. We believe that there are still enough quality properties on the market to satisfy investor demand in both the prime and secondary segments." write your comments about the article :: © 2014 Construction News :: home page |