Coffee with Craig Show – daily CRE news covering the CEE region, Thursday, January 26, with Winston Norman, Editor and Chief of EuropaProperty.com.
Global investment activity not likely to rebound until H2 2023
International real estate advisor Savills says that it expects investment activity to rebound in the second half of 2023, as the economic outlook improves, and normalises in line with long-term average levels.
Savills says investors will focus on core picks and value-add strategies (retrofitting, repurposing, focus on gaps of supply).
Prime logistics in key trade hubs and countries with rising e-commerce penetration rates will remain at the top of investor strategies.
Rising interest rates, causing global pricing corrections, are likely to trigger some distressed sales. Opportunistic investors are likely to take advantage of assets with long-term value through active asset management and repositioning.
Stuart Jordan, Managing Director and Head of Investment at Savills Czech Republic and Slovakia, adds: “CEE markets are very unlikely to buck the trends of global price movements, investor sector sentiment or the rapid race towards sustainability but open-end fund structures and long-term investors will find value later in the year once price adjustments have led to value benchmarking.”
Focus Estate Fund acquires Ferio Legnica shopping centre
Focus Estate Fund has expanded its operations in Poland with the acquisition of Ferio Legnica, a shopping centre in the city of Legnica in southwestern Poland, from Austria’s Raiffeisen Bank International.
The retail centre has a leasable area of 13,200 sqm, and an estimated footfall of around 2 million a year. Key anchors include Netto, Pepco, Kik, Sinsay, Jysk, Action, and Rossmann.
Commenting on the acquisition, Maxim Shkolnick, Focus Estate Fund General Partner, said: “Although it is now substantially pre-leased, we have identified a number of exciting customer-centric, value-added opportunities that we want to pursue in line with our investment strategy.”
CBRE represented the seller in the transaction. “This acquisition will bring new opportunities and growth to the centre, and we look forward to seeing the positive impact it will have on the tenants, shoppers, and the community as a whole,” said Michał Berski Associate Director in the Capital Markets Department at CBRE.
Primark to open first shop in Hungary this autumn
Primark’s first Hungarian store will be opened in NEPI Rockcastle’s Arena Mall shopping centre in Budapest and is part of the ongoing expansion of the global retail chain.
The company announced further openings in the CEE region and Slovakia will follow soon. New openings are expected in Bucharest, Łódź and Wrocław.
Primark entered Slovenia, Poland, Serbia, Romania and the Czech Republic earlier.
Occupier activity in Warsaw returns to pre-pandemic levels
According to “Office Occupier – Warsaw Office Market”, a report published by real estate advisory firm Newmark Polska, new office supply reached 237,000 sqm in 2022, bringing Warsaw’s total prime office stock to close to 6.27 million sqm at the end of the year. The gross office take-up hit 860,000 sqm.
“In 2022, occupier activity on the Warsaw office market returned to pre-pandemic levels despite a slowdown in construction activity. Lease renegotiations and renewals continued to account for a relatively high proportion of total take-up, while the vacancy rate decreased,” says Agnieszka Giermakowska, Research & Advisory Director, Newmark Polska. “2023 is shaping up to be a year of green leases and ESG solutions helping both tenants and landlords to bring costs down.”
At the end of 2022, Warsaw’s development under construction amounted to 180,000 sqm, down by almost 50 percent year-on-year. The annual development pipeline scheduled for delivery in 2023-2024 will be below 100,000 sqm. This is the lowest volume the Warsaw office market has seen since 2000.
ECE further develops G3 shopping resort near Vienna
ECE is further developing the G3 Shopping Resort near Vienna and is expanding the offer and tenant mix of the centre with its more than 130 stores with new retail, product testing and experience areas. The aim is to create a unique sport and outdoor focus – on a 5,000 sqm indoor sports retail area and a 3,000 sqm outdoor sports area – as an additional attraction for the centre.
Construction work on the project will start in early February, with completion and opening scheduled for June this year. The ECE Progressive Income Growth Fund as its owner is investing around €12 million in the further development of the centre. ECE Marketplaces, which also operates and leases the centre, is responsible for the planning and implementation.