Property Times Poland Q2 2011 Poland in the sights

Property Times
Poland Q2 2011
Poland in the sights
15 July 2011

Poland has maintained its strong position in terms of macroeconomic
performance compared with other European countries with a 3.8% GDP
growth recorded by the National Bank of Poland (NBP) at the end of 2010.
Retail sales and industrial output continued recording a healthy growth rate.
The economy may still face some structural reforms ahead.

In H1 2011 the office stock in Warsaw increased by 28,000
sq m and reached 3.5 million sq m in total. New completions occurred only in
two subzones: the Upper South and City Centre, which are also the two
largest business districts in the city. Due to growing demand and decreasing
availability of offices, prime asking rents in the city centre increased slightly
(by €1-2 per sq m per month) and have reached €24-26 per sq m per month.

The total supply of modern retail stock in Poland (defined as retail schemes
exceeding 5,000 sq m GLA delivered after 1990) totalled 10.5 million sq m at
the end of H1 2011. 71% of the total modern stock is located in shopping
centres which translates into approximately 7.5 million sq m. The retail
market experienced revival from both supply and demand sides. Due to
extensive pipeline, prime rents remain stable.

The modern logistics market slightly increased in the first half of 2011 and
reached a level of 6.6 million sq m. Due to the continued low development
activity observed from the second half of 2009, new supply in H1 was lower
than 100,000 sq m. Relatively stronger demand translates into a gradual
decline in vacancy rates. In H1 2011 headline rents in Warsaw remained at
the same level, however in other regions they grew slightly to €3.30–3.50 per
sq m per month.

The first half of 2011 continued to prove the recovery on the commercial real
estate investment market in Poland. The first half of 2011 finished with
transaction volume reaching €1.1 billion, constituting almost 60% of the total
volume recorded last year. Currently prime office and retail yields are
oscillating between 6.25% and 6.50%. Prime logistics yields stabilised at the
level of 8.50%.
Contents
Economic Overview
Office Market Warsaw
Retail Market Poland
Industrial Market Poland
Investment Market Poland
2
4
7
9
11
Authors
Anna Staniszewska
Director, Consulting & Research
+48 (0)22 222 3130
[email protected]
Olga Drela
Consultant, Consulting & Research
+48 (0)22 222 3134
[email protected]
Katarzyna Lipka
Consultant, Consulting & Research
+48 (0)22 222 3132
[email protected]
Agnieszka Ciołkiewicz
Junior Consultant,
Consulting & Research
+48 (0)22 222 3139
[email protected]
Michal Nawrot
Junior Consultant,
Consulting & Research
+48 (0)22 222 3135
[email protected]
Figure 1
GDP growth and inflation, y-o-y
GDP
2012 f
2011 f
2010
2009
2008
2007
2006
2005
Tony McGough
Global Head of Forecasting &
Strategy Research
+44 (0)20 3296 2314
[email protected]
2004
Magali Marton
Head of CEMEA Research
+33 (0)1 49 64 49 54
[email protected]
8%
7%
6%
5%
4%
3%
2%
1%
0%
2003
Contacts
Inflation
Source: Central Statistical Office (GUS), (f)- Natonal Bank of Poland (NBP)
www.dtz.com
1
Economic Overview
Summary
Poland proved that it is a stable developing economy in
2010, with GDP growth reaching a level of 3.8%.
In general, the Polish economy is in a relatively good
condition, but there are also reasons for concern
including budget deficit, which reached 7.9% of GDP at
the end of 2010 and public debt which accounted for 55%
of GDP at the end of the same period. It should be noted
that according to internal Polish regulations as well as EU
standards, the Polish government is obliged to cut
expenditures to keep debt below mentioned level of 55%.
In order to reduce the budget deficit, a reform of the
pension system was introduced. This reform may result in
a decrease of indirect investments into the Polish market
and have an overall negative influence on the
performance of the economy in the future.
Economic Growth
2010 saw a 3.8% increase in GDP, which is a much
better result than 1.6% growth in 2009. The positive
economic indicators are an effect of fast rising consumer
expenditure and an increase in public investment volume
during 2010. According to the National Bank of Poland
(NBP), GDP growth may reach 3.2% and 4.6% in 2011
and 2012 respectively.
Figure 1
The currency exchange rates EUR/PLN and USD/PLN
PLN
5,00
4,50
4,00
3,50
3,00
2,50
2,00
1 EUR
1 USD
Source: Natonal Bank of Poland (NBP)
Figure 2
Foreign Direct Investments (FDI)
mln €
18 000
15 000
12 000
9 000
6 000
3 000
2011Q1
2010
2009
2008
2007
2006
2005
Trade balance
mln €
160 000
120 000
80 000
40 000
Import
2010
2009
2008
2011Q1
Export
2007
2006
0
2003
After a decrease to € 9.3 bn in 2009, FDI slightly
recovered in 2010 reaching € 9.8 bn (4.9% growth y-o-y).
Based on the results from Q1 2011 and other factors, we
should expect a higher FDI volume in 2011.
Figure 3
2005
Foreign Direct Investments (FDI)
Source: National Bank of Poland (NBP)
2004
An increase in the VAT rate together with turbulences on
the raw materials market and food market influenced the
level of inflation, which leveled at 2.6% in 2010.
According to the NBP forecast, despite the VAT rise
which came into effect at the beginning of this year,
inflation should not exceed 2.7% and 2.9% in 2011 and
2012 respectively.
2004
2003
0
Inflation
Source: Central Statistical Office (GUS)
www.dtz.com
2
Economic Overview
Trade Balance
Figure 4
Polish export rose by 20% from € 98.2 bn in 2009 to €
117.4 bn in 2010. During the same period of time, import
volumes increased by 22% from € 107.5 bn to € 130.9 bn.
An increase in the rate of import growth combined with
export increase has proven to be a typical factor related
to the economic recovery in Poland. Among the main
recipients of Polish products and services are Germany
(25.9%), France (7.2%) and Great Britain (6.9%). The
majority of Polish import came from three countries
namely Germany (21.3%), Russia (10.1%) and China
(9.9%).
Unemployment rate
25%
20%
15%
10%
5%
2012 f
2011 f
2010
2009
2008
2007
2006
2005
2004
2003
0%
Unemployment and salary
The unemployment rate at the end of 2009 reached a
level of 11.9% and slightly increased to 12.3% at the end
of 2010. On the short time basis the unemployment rate
trend remains stable. According to the Central Statistical
Office, the level peaked at 12.2% in May 2011. Analysts
are of the opinion that an improvement of the overall
economy in 2011 will be reflected by a decrease in the
unemployment rate which should reach 11% by the end
of the year.
Source: Central Statistical Office (GUS), (f)- Natonal Bank of Poland (NBP)
Figure 5
Industrial production growth, y-o-y
14%
12%
10%
8%
6%
0%
2011Q1
2010
2009
2008
2007
-4%
2006
-2%
2005
Annual growth in industrial production reached 9.7% in
2010, compared with 2009. The first quarter of 2011
showed an 8% increase with 25 out of 36 industrial
sectors which noted an upward trend. The fastest pace
occured in metal manufacturing (30.8% y-o-y), other nonmetallic mineral resources manufacturing (29.9% y-o-y)
and furniture manufacturing sectors (28.2% y-o-y). The
most significant decrease of production was noted in
tobacco products (-16.1% y-o-y) and manufacturing of
machinery and equipment (-8.6% y-o-y).
2%
2004
Industrial Production
4%
2003
The average monthly salary in the enterprise sector rose
by 3.2% from PLN 3,325 at the end of 2009 to PLN 3,435
at the end of 2010. In May 2011 it reached PLN 3,484.
Source: Central Statistical Office (GUS), Ministry of Economics
Figure 6
Retail sales, y-o-y
30%
25%
20%
Retail Sales
During the first three months of 2011 retail sales
increased y-o-y by 5.8%, 12.2% and 9.4% compared to
the same months last year. According to analysts, retail
sales growth should continue its upward trend.
15%
10%
5%
0%
-5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2008
2009
2010
2011
Source: Central Statistical Office (GUS)
www.dtz.com
3
Office Market - Warsaw
Supply
In H1 2011 the office stock in Warsaw increased by
28,000 sq m and reached 3.5 million sq m. New
completions occurred only in two subzones: the Upper
South and City Centre which are the two largest business
districts in the city (Fig. 7).
Figure 7
Office stock by subzones, End H1 2011
sq m
1 000 000
900 000
800 000
700 000
An additional 90,000-95,000 sq m is scheduled for
completion in 2011 which will bring the annual level of
supply to 120,000-125,000 sq m. It is one of the lowest
values recorded so far on the market and results from the
economic slowdown, weaker demand and a tougher
lending policy observed in 2009.
600 000
500 000
400 000
300 000
200 000
100 000
0
The level of deliveries in 2012 is likely to be much higher
and reach over 200,000 sq m, the majority of which is
located out of the city centre.
Upper City South
South Centre West
Core
West
East
Lower South North
South East
Source: DTZ Research, WRF
2012(f)
2010
2009
Take-up
Source: DTZ Research, WRF
2011(f)
Supply
2008
2007
2006
2005
2004
2003
Many companies in H1 2011 decided to renegotiate their
current leases and the volume of such transactions stood
at nearly 100,000 sq m. Due to decreasing availability of
office space within existing buildings, pre-lets have
become a popular market practice. The level of
transactions signed before building completion in H1
2011 amounted to 81,000 sq m, compared to
63,000 sq m during 2010.
sq m
500 000
450 000
400 000
350 000
300 000
250 000
200 000
150 000
100 000
50 000
0
2002
The high level of take-up resulted from the improving
macroeconomic situation as well as the limited pipeline
supply in 2011, which may lead to reduced availability
and rental growth.
Annual office supply and take-up
2001
The volume of leasing transactions (excl. renegotiations)
in H1 2011 reached 228,000 sq m which represents a 60%
increase in comparison to the corresponding period of
2010.
Figure 8
2000
Demand
(f) Forecast
Figure 9
Office take-up by subzones, H1 2011
80% of the total take-up in H1 2011 occurred in three
major business districts: Upper South, South West and
City Centre (Fig. 9).
1%
6%2%
7%
33%
Given the positive macroeconomic outlook, the demand
in H2 2011 and 2012 is likely to remain at the current
high level.
24%
Upper South
South West
City Centre
Core
Lower South
West
South East
East
North
26%
Source: DTZ Research, WRF
www.dtz.com
4
Office Market - Warsaw
Figure 10
Assuming a lower level of new deliveries as well as
strong demand, the vacancy rate is likely to slightly
decrease by the end of 2011 (Fig. 10).
20
15
10
5
Average
Central
2012(f)
2011(f)
2010
2009
2008
2007
2006
2005
2003
2004
0
2002
Similarly to the last few quarters, the highest vacancy
rate was recorded in the Lower South subzone. In the
West, South East and East subzones, the availability
ratio was the lowest among other districts in Warsaw.
In the Upper South the vacancy rate dropped from
8%-9% recorded over the whole 2010 to 5.5% (Fig. 10).
%
25
2001
Due to strong demand and limited new supply the
vacancy rate in H1 2011 dropped from 7.2% at the end of
2010 to 6.2%. The availability ratio in central subzones
remained at 8.1% and outside the city centre decreased
from 6.7% to 5.2% (Fig 10).
Office availability ratio
2000
Vacancy
Non Central
Source: DTZ Research, WRF
Figure 11
Office availability ratio by subzones, End H1 2011
Rents
3,2%
East
3,6%
South West
4,9%
Upper South
5,5%
North
6,4%
Core
6,7%
City Centre
9,0%
Lower South
11,5%
0%
2%
6%
8%
10%
12%
(f) Forecast
Figure 12
Prime office rental levels
Source: DTZ Research
2012(f)
2011(f)
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
€ / sq /
month
45
40
35
30
25
20
15
10
5
0
Central
www.dtz.com
4%
Source: DTZ Research, WRF
1998
Over the next 12-18 months prime asking rents in non
central locations are likely to remain stable and they may
increase by approx. €0.5-1 in the Central Business
District.
At the same the incentive packages are going to further
decrease, exerting an upward pressure on effective rents.
2,7%
2000
Incentive packages offered by landlords to attract
occupiers dropped slightly in comparison to 2010, which
resulted in an increase of effective rents. Depending on
the size of the requirement and stage of a project,
effective rents in H1 2011 were approximately 10-20%
lower than the asking rates.
West
South East
1999
In H1 2011 due to growing demand and decreasing
availability of offices, prime asking rents (for A class
office buildings) in the city centre increased slightly
(by €1-2 per sq m per month) and have reached
€24-26 per sq m per month. In non central subzones they
remained at €14-16 per sq m per month. For B class
properties asking rents reached €19-22 per sq m per
month in the city centre and €12-14 per sq m per month
in other locations.
Non Central
(f) Forecast
5
Office Market - Warsaw
Table 1
Office buildings completed in H1 2011
Office area
(sq m)
District
Developer
Vacancy at
completion date
Platinium Business Park IV
13,000
Upper South
GTC
0%
Mokotowska Square
8,500
City Centre
Yareal
88%
Pałac Młodziejowskiego
5,000
City Centre
Mermaid Properties
39%
Racławicka Point
1,900
Upper South
Capital Park
10%
Building
Source: DTZ Research, WRF
Table 2
Major pipeline office projects scheduled for delivery in 2011
Office area
(sq m)
District
Developer
Mokotów Nova I
26,000
Upper South
Ghelamco
Equator II
21,000
South West
Karimpol
JM Tower
16,500
City Centre
JM Invest
Libra Business Centre B
15,600
South West
Mermaid Properties
Hortus
10,200
City Centre
Nieruchomości Powiśle
Prosta Tower
8,400
City Centre
Marvipol Development
Building
Source: DTZ Research, WRF
Table 3
Major leasing transactions signed in H1 2011
Office area leased
(sq m)
Building
District
Type of transaction
Telekomunikacja Polska
43,700
Miasteczko TP
South West
Pre-let
Ernst&Young
11,000
Rondo 1
Core
Renewal
Frontex
8,800
Rondo 1
Core
Renewal + expansion
PTK Centertel
8,700
Renaissance Plaza
West
Renewal
ING Usługi Finansowe
6,000
Hortus
City Centre
Pre-let
Sygnity
5,600
Kopernik I
South West
Renewal
MSD
5,400
Warsaw Trade Tower
City Centre
Renewal + expansion
GlaxoSmithKline
4,400
Cirrus
Upper South
Renewal
Emerson
4,400
University Business Center II
Upper South
New transaction
PolskaPresse
3,200
Empark Saturn
Upper South
Renewal
Kapsch Telematic
Services
3,100
Poleczki Business Park
Lower South
New transaction
Tenant
Source: DTZ Research, WRF
www.dtz.com
6
Retail Market
Supply
The total supply of modern retail stock (defined as retail
schemes exceeding 5,000 sq m GLA delivered after
1990) in Poland totalled 10.5 million sq m at the end of
H1 2011. 71% of the total modern stock is located in
shopping centres which translates into approximately 7.5
million sq m.
Figure 13
Annual retail supply by size of the city
sq m
1 000 000
800 000
600 000
DTZ forecasts that the new supply by the end of 2011
will reach approximately 500,000 sq m GLA, which will
bring the annual volume of retail completions to around
800,000 sq m. The major ones include: Millenium Hall in
Rzeszów, Kaskada in Szczecin and the extension of
Echo Shopping Center in Kielce. Currently there are
some 900,000 sq m under construction with opening
scheduled between 2011 and 2013. Major examples of
retail projects planned to be delivered after 2011 include
Galeria Katowicka in Katowice, City Center in Rzeszów,
Alfa Grudziądz in Grudziądz and Galeria Olimpia in
Belchatów. Such extensive pipeline proves that
confidence is returning to developers in the Polish
market.
400 000
200 000
Over 400,000
200 - 400,000
100 - 200,000
2011f
2010
2009
2008
2007
2006
2005
2004
2003
0
2002
Cumulatively, new projects delivered in H1 2011 including
new shopping centres and extensions, as well as retail
warehouses amounted to approximately 290,000 sq m,
which constitutes 53% of the annual supply in 2010. New
stock includes 16 new projects and 5 extensions of
existing schemes. Major completions in H1 2011 include:
Galeria Słoneczna in Radom, Turawa Retail Park in
Opole, Morski Park Handlowy in Gdańsk, Galeria
Leszno in Leszno, Galeria Twierdza in Zamość and
Centrum Gołąbkowice in Nowy Sącz.
Below 100,000
Source: DTZ Research
Figure 14
Modern retail space type in major agglomerations
100%
80%
60%
40%
Only 32% of supply delivered in H1 2011 was situated in
eight major Polish agglomerations with populations
exceeding 400,000 (Fig.13). More resistant to economic
slowdown and benefiting from high purchasing power of
inhabitants, markets in larger cities were in the past
more attractive for developers which stemmed from a
steady demand from retailers. However the growing
trend of developers’ interest in smaller cities is
noticeable. Almost 50% of deliveries in H1 2011 was
completed in cities with inhabitants’ number below
200,000 such as Nowy Sącz, Leszno, Ostróda or Słupsk.
The markets in large agglomerations are diversified in
terms of competitiveness, retail density (sq m per
thousand inhabitants, purchasing power per inhabitant
and quality of the retail space). 50% out of over 6.4
million sq m located in eight major agglomerations is
occupied by large scale big boxes (food operators, DIY,
electronic appliances etc.) either stand alone or located
in traditional shopping centres (Fig. 14). The most
mature markets in terms of diversity of operating formats
are Wrocław, Warsaw and Tricity.
www.dtz.com
20%
0%
Stand alone retail warehouse
Large scale operators in shopping centres
Shopping malls within shopping centres
Retail parks
Outlets
Other
Source: DTZ Research
7
Retail Market
Demand and Rents
In recent quarters DTZ recorded a gradual return of
retailer confidence and increased activity on the market;
however their position was still very strong. The majority
of anchor tenants are still selective in terms of retail
schemes, preferring operating projects to those in the
pipeline and demanding high fit-out contributions.
Hypermarket, supermarket and DIY operators remain
very active in 2011 and present a more flexible approach
to new locations and smaller cities.
Figure 15
Prime retail rents in H1 2011
€ per sq m
100
90
80
70
60
50
40
30
20
10
The good macroeconomic situation in Poland in times of
economic slowdown in comparison to other European
countries has supported the perception of economic
stability. This fact encourages international players to
enter the Polish retail market. The following chains have
announced they will open stores in 2011: Answear,
Arqueonautas, Catimini, Centro, Desigual, H3, Jula, LC
Waikiki, Lindex, Oviesse, Redgreen, QQ-Duck and Toys
R Us.
Retail chains are still eager to expand via franchise,
enabling the minimisation of costs, as well as the desire
to enter smaller cities. There are also many established
retail chains planning to expand their operations in
Poland, profiting from the current economic climate such
as 5-10-15, Cinema City, Deichmann, Diverse. Douglas,
H&M, Komfort, L’Occitane, Max Mara, New Yorker,
Rossmann, Takko Fashion and TK Maxx.
0
Kraków
Łódź
Poznań
Szczecin
TriCity
Upper
Silesia
Warsaw
Wrocław
Source: DTZ Research
Table 4
Major retail schemes completions in H1 2011
Scheme
City
GLA (sq m)
Units
Galeria Słoneczna
Radom
42,000
170
Turawa Retail Park
Opole
38,000
70
Galeria Leszno
Leszno
32,000
110
Galeria Twierdza
Morski Park
Handlowy
CH Gołąbkowice
Zamość
27,500
80
Gdańsk
26,000
35
Nowy Sącz
17,900
50
Source: DTZ Research
Prime properties continued attracting high interest from
both operating players as well as from new entrants.
Therefore prime rents in shopping centres remain stable
in 2011 (Fig. 15). In the secondary properties, new lease
agreements were concluded at levels lower by 10 - 20%
which resulted in a growing discrepancy between prime
and average rents.
In H2 2011, DTZ forecasts further and stronger retailer
expansions, which together with the delivery of high new
supply, will result in a rather organic and slow growth in
rental levels. This increase will mainly apply to well
perfmorming schemes.
Among recently rising trends, DTZ has recorded growing
interest from landlords in redevelopment and
repositioning their activities with the aim of increasing
their proactive retail asset management of existing
projects. There is still development potential in smaller
convenience shopping centres designed for people in
larger cities who want to do their daily shopping close by
and save time, or retail parks located within smaller
cities suburbs.
www.dtz.com
Table 5
Major pipeline schemes scheduled by end of 2011
Scheme
City
GLA (sq m)
Units
Millenium Hall
Rzeszów
55,600
250
Galeria Kaskada
Szczecin
43,000
140
Echo Dekorada
(extension)
Kielce
40,000
60
Plaza Toruń
Toruń
40,000
140
Galeria Ostrovia
Ostrów
Wielkopolski
37,200
100
Jantar (extension)
Słupsk
23,000
90
Source:
DTZ Research
8
Warehouse & Logistics Market
Stock
The modern logistics market slightly increased in the first
half of 2011 and reached the level of 6.6 million sq m
(Fig. 16). Due to a continued low development activity
originating from the second half of 2009, the new supply
in H1 was lower than 100,000 sq m.
Developers still deliver mainly built-to-suit schemes and
refrain from speculative investments.
On the Polish modern logistics schemes map there are
1
still five hot spots namely Greater Warsaw , Central
Poland, Upper Silesia, Lower Silesia and Poznań
Region. Emerging locations such as the regions around
Kraków, Tricity or Szczecin still remain on the radar of
many developers and tenants.
Figure 16
Modern warehousing supply and take–up
sq m
1 800 000
1 600 000
1 400 000
1 200 000
1 000 000
800 000
600 000
400 000
200 000
0
2005 2006 2007 2008 2009 2010 2011(f)
Annual supply
Take-up
Demand expressed by the space being transacted
reached 300,000 sq m in Q1 2011, which was around
100,000 sq m lower than in the same period last year.
However in Q2 2011, take-up significantly increased and
achieved a record level of 500,000 sq m. The actual
figure of nearly 800,000 sq m in H1 2011 therefore
proves the situation is positive on the logistics market in
Poland.
The largest transactions still apply to built-to-suit
schemes and renegotiations. Tenants chose mainly
outlying Warsaw regions and Upper Silesia (Fig. 17).
Vacancy Rates and Rents
Relatively stronger demand translates into a gradual
decline of vacancy rates. We estimate these dropped
from 15.3% at the end of 2010 to 13.5% in H1 2011. The
available modern logistics stock amounted to
approximately 900,000 sq m, which represents a
decrease of above 100,000 sq m in comparison with Q4
2010. The region characterised by the highest vacancy
rate was again Warsaw Zone 3 and the lowest indicator
was recorded in the Poznań region.
Annual take-up
Source: DTZ Research
Figure 17
Take-up by region – H1 2011
Warsaw Zone III
3%3%
3%
Upper Silesia
22%
6%
Central Poland
Warsaw Zone II
9%
Lower Silesia
Warsaw Zone I
11%
18%
Poznań Region
Kraków Region
TriCity Region
12%
13%
Other Region
Source: DTZ Research
From the beginning of 2009, headline rents have slightly
decreased by €0,7 in Warsaw and €0,2 per sq m per
month regionally. In Q4 2010 they stabilised around €5.3
per sq m per month in Warsaw and between €3.00–3.30
per sq m per month in regional locations.
In H1 2011, headline rents in Warsaw remained at the
same level, however in other regions they slightly grew
to €3.30–3.50 per sq m per month.
1
Due to its maturity the Greater Warsaw area is divided into three
zones: Zone 1 – In-Town – schemes located within the Warsaw
boundaries, Zone 2 – City Fringe – warehouses located within
15 – 30 km of the city centre, Zone 3 – Outlying – Logistic/warehouses
situated within 30 – 50 km radius of the city centre.
www.dtz.com
9
Warehouse & Logistics Market
Table 6
Examples of logistics transactions – H1 2011
Q
Region
Building
Tenant
Size (sq m)
2
Warsaw Zone 3
ProLogis Park Sochaczew
Procter&Gamble
49,740
2
Central Poland
Panattoni Radomsko
Manuli Hydraulics Manufacturing
35,000
2
Warsaw Zone 3
ProLogis Park Teresin
Solid Logistics
30,000
1
Upper Silesia
ProLogis Park Chorzów
ID Logistics
20,200
1
Lower Silesia
ProLogis park Wrocław V
ND
19,100
2
Lower Silesia
Panattoni Gorzów Wielkopolski
Faurecia
17,600
2
Kraków Region
Kraków Airport Logistic Centre
Valeo
17,400
1
Warsaw Zone 3
ProLogis Park Błonie
Rhenus Contract Logistics
17,100
1
Warsaw Zone 2
Panattoni Park Święcice
Tech Data Polska
16,600
1
Upper Silesia
ProLogis Park Sosnowiec
Wincanton
16,600
2
Central Poland
Tulipan Park Stryków
Hellmann Worldwide Logistics
15,000
1
Poznań Region
ProLogis Park Poznań II
ND
13,500
2
Poznań Region
Panattoni Park Poznań I
Arvato Services
12,600
1
Warsaw Zone 1
Annopol Logistic Park
Ruch SA
12,100
1
Upper Silesia
ProLogis Park Chorzów
Latex Groehl Gerard
11,600
1
Warsaw Zone 2
ProLogis Park Nadarzyn
ND
11,200
Source: DTZ Research
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10
Investment Market
The majority of transaction volumes in the last 18
months accounts for new, higher quality properties
including the best shopping centres in Poland. However,
the lower grade properties in secondary cities were also
purchased by those investors with rather opportunistic
strategies.
The investment market in Poland is dominated by
foreign players. French, German and Austrian investors
remain most active, but after years of absence, we can
see investors from the Netherlands and USA returning to
the Polish market. German property funds active during
the market slowdown mainly in the office sector are now
considering retail properties.
Yields
Transactions recently completed show some downward
shift in yields. This is strongly connected with the overall
perception of the Polish economy and also returning
confidence in the occupier markets. Currently prime
office and retail yields are oscillating between 6.25% and
6.50%, which shows a drop of some 250 bps. Prime
logistics yields stabilised at the level of 8.50%.
We also noted an increase in the number of transactions
involving shares allowing partial ownership. These deals
are often concluded under special conditions including
lower yields (Fig. 19).
€m
Volume of transactions
Number of transactions
2011 f
2010
2009
2008
2007
2006
2005
2004
2003
5 000
4 500
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0
2002
Investors’ interest in previous years was evenly
distributed between retail and office properties. This
trend remained and we estimate that 47% of the total
volume of transactions during the first six months of
2011 accounts for office properties, 43% for retail and
another 10% for logistics properties.
Investment volumes in Poland
2001
Transaction activity in the Polish market evidently
indicates that the recovery on the commercial property
investment market that started in 2010 has continued
into 2011. The first half of 2011 ended with a transaction
volume of €1.1 billion.
This constitutes almost 60% of the total volume recorded
last year. There were relatively large transactions
finalised which meant that the average deal size
increased to €60 million from €40 million in previous
years. Given the strong pipeline of transactions, DTZ
foresees the investment volume in 2011 reaching
approximately €2.5 billion (Fig. 18).
Figure 18
2000
Investment activity
Source: DTZ Research
Figure 19
Prime investment yields
14%
12%
10%
8%
6%
4%
Office
Retail
Logistics
Source: DTZ Research
Yields for the secondary assets are on average
100 -125 bps higher. DTZ expects further yield
compression in the coming quarters both in the prime
and secondary segments.
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11
Disclaimer
This report should not be relied upon as a basis for entering into transactions without
seeking specific, qualified, professional advice. Whilst facts have been rigorously
checked, DTZ can take no responsibility for any damage or loss suffered as a result of
any inadvertent inaccuracy within this report. Information contained herein should not,
in whole or part, be published, reproduced or referred to without prior approval. Any
such reproduction should be credited to DTZ.
© DTZ July 2011
www.dtz.com