Coffee with Craig Show – daily CRE news covering the CEE region, Thursday, November 17 with Winston Norman, Editor and Chief of EuropaProperty.com.
New supply gap in regional markets is one step behind the capital
In Poland’s largest regional markets there has been a visible slowdown on the side of developers, who are cautious about starting new investments due to rising financing costs, says JLL. Further, a significant portion of planned projects, are dependent on securing a key tenant.
As of the end of Q3 2022, nearly 560,000 sqm was under construction, most of which will hit the market by the end of 2024. It is likely that not all of these projects will be completed on time, and some will even be temporarily suspended due to the lack of a key tenant. As a result of this level of developer activity and the current economic situation, a new supply gap is expected in Poland’s largest office markets, outside Warsaw, starting in 2024.
“The projected total tenant activity in 2022 may exceed 600,000 sqm, remaining at a similar level in the following years. It is worth noting that in markets outside of Warsaw, office demand remains largely generated by tenant relocations to better quality office buildings,” says Hanna Wyrzykowska, Research Analyst, Research and Consultancy Department, JLL.
“The market continues to see upward pressure on prime office rents, driven by the high costs associated with space arrangement or construction costs of new buildings,” emphasizes Karol Patynowski, Regional Markets Director, JLL.
Biggest toy manufacturer in Skyliner
Mattel Poland is another global player to become a tenant of the Skyliner office building in Warsaw. The new tenant will occupy 660 sqm of space in Karimpol‘s investment.
The Polish branch of Mattel was established in 2005. Skyliner will be its headquarters starting in 2023. The lease was brokered by CBRE.
“Warsaw’s Wola is the most dynamically developing business district in the capital city and the Skyliner is at its heart. The qualities of our flagship investment are appreciated by local and international giants,” said Harald Jeschek, Managing Partner at Karimpol Group.
Private residential investors also interested in income-producing real estate assets
Income-producing properties are becoming an increasingly appreciated option for Romanian and foreign private investors who have previously been mainly active in the residential sector and who are now targeting “trophy” assets. Their focus is currently on all market segments – office, retail, industrial or hospitality, according to data from the Cushman & Wakefield Echinox real estate consulting company.
Mihaela Pană, partner Residential Agency Cushman & Wakefield Echinox, commented: “This category of buyers covers a market segment with limited exposure towards funds and institutional investors, as it does not fit their acquisition strategies. Therefore, whether we refer to entrepreneurs who have available liquidity resulting from other businesses, or to families who have already been investing in real estate, private investors are extremely active nowadays, as they have made acquisitions of more than €200 million in the last 3 years alone.”
Speedwell launches sales in the second phase of PALTIM
SPEEDWELL has launched sales for the apartments in the second residential building of PALTIM. A stock of 113 more units will be available in the mixed-use ensemble the developer is developing on the promenade of the Bega River, in Timisoara.
“Launching sales for the second building of PALTIM marks an important milestone. We are happy to have arrived at this step, especially since the construction works are ongoing for the first building with Strabag as General Contractor,” said Jan Demeyere, Architect and Co-Founder at SPEEDWELL.
PALTIM is a mixed-use development that combines premium apartments with office, and retail spaces, as well as two historical buildings that are going to be refurbished.
