Coffee with Craig Show – daily CRE news covering the CEE region, Tuesday, November 8, with Winston Norman, Editor and Chief of EuropaProperty.com.
Living and logistics sectors join CBD offices in top European investors’ wish list
According to a survey conducted by Savills involving real estate investors with total EME assets under management exceeding €500 billion, European multifamily, big box logistics, urban logistics, CBD offices and student housing are the top five sectors that investors are looking to invest in over the next 12 months.
When asked about their strategy going forward, over 55 percent of respondents indicated that they are now looking to follow a more defensive approach, focusing on the so-called ‘beds and sheds’ sectors, along with CBD offices, in the most liquid markets in Europe. This is mainly because over 76 percent of respondents confirmed that re-financing will significantly impact their total returns over the next two years.
Chris Gillum, Head of Offices, European Capital Markets, says: “Our survey confirms that certain real estate sectors will continue to see investor demand while others have, currently, fallen out of favour. Particularly those with rental growth potential are at the top of the list, linked to, for example, stronger indexation in the continental European office market.”
John Palmer, Head of Industrial Investment in Poland adds: “The price expectation gap between buyers and sellers has significantly widened, nevertheless, industrial investments in Poland have the benefit of strong fundamentals for future rental growth which is an attractive ingredient for investors not readily found today in Western markets.
Catella sells fully-let residential and student housing properties in Poland
Berlin-based Catella Residential Investment Management GmbH (CRIM) has sold two centrally located fully-let residential and student housing assets in Warsaw and Krakow in Poland to institutional investors in Austria and the Netherlands for more than €60 million on behalf of Munich-headquartered AIFM platform Catella Real Estate AG (CREAG).
With 38 million inhabitants, Poland is the largest market in Central and Eastern Europe and faces a shortage of between 1.5 to 3 million rental apartments. Poland’s purpose-built student accommodation (PBSA) market is also very attractive for investors as the country has some 1.2 million students and very few institutional student dormitories.
Benjamin Rüther, Head of Fund Management at CRIM, said: “The Polish residential market is predominantly (around 80 percent) an owner-occupier market, but is shifting to a rental market, which will offer attractive investment opportunities for years to come.”
Clifford Chance acted as legal advisor on both sales.
Construction activity at record low on Warsaw’s office market
Q3 2022 in the Warsaw office market saw record-low developer activity. At the end of September, only 160,000 sqm of space was under construction. As a result, new supply is expected to drop significantly in 2023, with only 60,000 sqm of office space coming to the market.
In the past few months, nearly 100,000 sqm of office space was delivered in Warsaw. Among the completed developments were HB Reavis’ flagship project Varso Tower (63,800 sqm) and the P190 office building (32,000 sqm) from Skanska. JLL experts expect that the year-end will see the start of new investments, including Drucianka Campus (42,000 sqm) and The Form (29,000 sqm).
“The past two years have been marked by a significant slowdown on the developers’ part, which translates into a significant drop in new supply. In 2023, the capital will see only 60,000 sqm of new office space. This translates into a number of changes in the market – after nearly three years, the segment of Class A real estate in downtown Warsaw is changing from a tenant’s market to a landlord’s market”, emphasized Piotr Kaminski, Head of Office Leasing, JLL.
BT invests in new office in Debrecen
British Telecommunications has signed a new agreement to relocate its operations in Debrecen to a state-of-the-art office in Great Forest city park, Forest Offices. Around 500 colleagues based in Hungary’s second-biggest city will move to the new location in 2023.
The move to the new office is set to provide an outstanding employee experience. It is also a sign of BT’s long-term commitment to Hungary and local talent.
“With this move, BT strengthens its position in Hungary as a strategic location for its critical services provided for customers. This announcement comes just months after the opening of our brand-new office in Budapest One. These investments further solidify our position as the employer of choice in Hungary and will provide a nice backdrop as we celebrate the 15th anniversary of our service centre here,” said Peter Győri, country host of BT in Hungary.
Owned by real estate investor and developer GTC Group, Forest Offices Debrecen is an A-category office building.
“BT’s decision confirms our efforts to attract those best-in-class companies that share our vision of sustainable and future-proof workspaces,” commented Csilla Vattay, Head of Leasing at GTC Hungary.
Scallier starts construction of retail park in Mosnita
A new retail park with an area of over 8,500 sqm (GLA) is being built in Mosnita, Romania. Completion of the new retail facility is planned for the third quarter of 2023. So far, the space has been secured by brands such as DM, Sportisimo, TEDi, Fressnapf, Clever Fit, which is over 50 percent of the available retail space.
“Romania remains one of the most attractive markets for retail real estate investors. The growing purchasing power of Romanian citizens, their growing requirements, and the lack of modern commercial real estate in medium and smaller Romanian cities are increasingly interesting for international and local tenants,” said Wojciech Jurga, Managing Partner at Scallier.
