Coffee with Craig Show – daily CRE news covering the CEE region, Friday, June 3 with Winston Norman, Editor and Chief of EuropaProperty.com.
CPIPG reports 243% y-o-y profit growth in Q1 2022
CPI Property Group reported first-quarter profit growth of 243 percent year-on-year to €381 million. It was able to do so thanks to its takeover of Austria’s Immofinanz. As a result, CPI is currently the Central European leader in real estate and is planning further expansion with the Austrian real estate company S Immo, where it now controls 42.6 percent along with Immofinanz.
Highlights for the first quarter of 2022:
CPIPG’s property portfolio rose to €18.1 billion, offset by disposals of €479 million.
Total assets reached €20.9 billion, including €1.6 billion of cash. Total available liquidity was €2.4 billion.
Net rental income increased to €110 million.
Occupancy was stable at 93.7 percent.
“CPIPG sees sustained strong demand for real estate and solid trends in rents and occupancy across our portfolio,” said Martin Němeček, CEO. “The Group’s strategic acquisitions and disposals have been executed successfully and our asset management teams continue to deliver great results.”
“Wait and see” strategy for investors in the first quarter
BNP Paribas Real Estate Poland has summarized the first three months in the Polish investment market and pointed out, among other things: a reduction in investor appetite and a wait and see approach caused by the war in Ukraine, rising inflation and commodity prices, as well as a hesitant start of the year in the sector of logistics and industrial investment.
After cautious optimism prevailing throughout the last year, the market experienced a quiet start in the first quarter of 2022. The total transaction volume was estimated at €1.65 billion and the structure was dominated by large volume contracts, including portfolio transactions. The most significant one was the record-breaking sale of the Warsaw HUB complex, whose new owner is now Google. The IT giant paid almost €568 million for the office building in Warsaw’s Wola district.
“Logistics and warehouse properties used to be at the top of the list as the most attractive and sought-after investment assets in the last two years. Therefore, the €200 million in total volume for the first quarter is a significantly underestimated result for this sector.”
However, “Another factor that further strengthens the potential of this sector, which will become visible in the upcoming months, may be an increase in demand driven by tenants closing their businesses in Russia,” says Mateusz Skubiszewski, Head of Capital Markets Department, BNP Paribas Real Estate Poland.
Industrial developer and occupier activity in Poland remains strong
According to the “Occupier Insight – Industrial and Warehouse Market Q1 2022”, a report prepared by Newmark Polska, Poland’s total warehouse and industrial stock surpassed the 25 million sqm mark, representing a 16.6 percent increase in the same period in 2021. New supply in the first three months of this year reached close to 1.3 million sqm, the best quarterly result in the history of the Polish market.
Most warehouse locations across Poland are seeing some rental growth amid rising construction and operation costs of warehouse and industrial facilities. At the end of the first quarter of 2022, the highest rents were in Warsaw (zone 1).
In the first quarter of 2022, the volume of investment into Polish commercial real estate reached €1.66 billion, up by around 18 percent from the same period last year. Currently, prime yields for multi-let industrial parks with long leases stand at 4.75 percent–5.25 percent.
“Leasing and development activity remained relatively strong in the Polish warehouse and industrial market throughout the first quarter of 2022. Availability shrank significantly for another consecutive quarter, with rising labour and construction costs as well as supply chain disruptions pushing rental rates up. Looking ahead, we expect developers will remain more cautious about starting new projects,” says Jakub Kurek, Head of Industrial and Warehouse, Newmark Polska.
Corwin wants to build a carbon-neutral office portfolio
Slovak developer Corwin has announced that its office projects in Bratislava and Ljubljana will soon join the list of LEED Zero Carbon certified carbon-neutral buildings.
While lowering emissions has been gaining great importance in recent years, full carbon neutrality is only expected to arrive by 2050. Even though Slovakia and Slovenia do not currently possess any carbon-neutral buildings, they could gain four of them more than two decades ahead of EU goals. That is because Corwin plans to join the carbon-neutral age and create the first LEED Zero Carbon certified office portfolio in the world within the next few years.
“First of all, it is necessary to take this goal in mind already during the design and construction phase of the project. That is why we always try to maximize our use of recycled and local materials, making the buildings as energy efficient as possible, utilising renewable natural energy through heat pumps or covering the roof with vegetation,” said Erik Fusík, Project Manager at CORWIN.