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DEMAND FOR MULTIFAMILY INVESTMENT IN EUROPE STRONG
Driven by large-scale mergers and acquisitions, European multifamily investment volumes in the 12 countries analysed reached approximately €92.3 billion in 2021, a 79 percent increase year-on-year and a 120 percent increase on the past five-year average, according to Savills.
The average prime multifamily yield in Western Europe compressed by 7 basis points (bps) year-on-year in 2021 to reach a record low of 3.05 percent. Prime net multifamily yield in Prague is 4 percent.
Fraser Watson, Director, Investment Advisory, Savills CZ&SK, says: “Demand for multi-family investment opportunities in the Czech Republic remains strong, with a growing pool of buyers actively seeking exposure to this resilient sector.”
According to Savills, multifunctional, mixed-use neighbourhoods have once again emerged as the ideal environment for thriving communities. This can lead to more mixed-use developments, which in addition to residential, include uses that will make them more attractive and resilient by providing, amongst others, affordable housing, convenience retail, flexible offices, health and wellness.
The challenge for core investors in 2022 will be to identify stabilised assets, while more opportunities will be available for new developments and forward funding agreements. However, labour shortages, rising construction costs and supply chain disruptions will slow down development activity.”
KGAL ACQUIRES CHARLES SQUARE CENTER IN PRAGUE
KGAL Investment Management acquired the Charles Square Center in Prague, on behalf of a pan-European fund. The city centre property with a total of almost 20,000 sqm of leasable space has a roster of international tenants and the seller was Commerz Real.
“The Charles Square Center is our second real estate investment in Prague. It offers us the opportunity to participate in Prague’s economic potential,” explains André Zücker, Managing Director and Head of Real Estate of KGAL Investment Management.
The Charles Square Center counts Cisco Systems, Dior, Raiffeisenbank and Commerzbank, as well as medical service providers among its tenants.
The multi-tenant property is almost fully let. The majority of the space, 14,000 sqm, is dedicated to offices. Built-in 2002, the Center has been certified as sustainable in accordance with the BREEAM standard.
FORTENOVA GROUP SELLS ZAGREB OFFICE TOWER TO AGRAM GROUP
The Cibona Business Tower is one of Zagreb’s most representative office buildings. It is located in the centre of the city, at a prestigious and easily accessible location, and has become one of the city’s most recognizable landmarks. The asset comprises office premises on 16 floors.
“After having largely completed the processes of divesting our non-core companies, the focus has been shifted to the sale of non-core real estate. We are happy to have found, within a very short time, a partner who will, I am sure, provide the required investment into this well-known building,” said James Pearson, Fortenova Group’s Chief Financial Officer.
“The Cibona Tower is an iconic building of the City of Zagreb and a great fit in the real estate portfolio of the Agram Group. Having recognized this investment opportunity we continue to invest in the local economy, and this acquisition coincides with the 30th anniversary of the Agram Group’s successful operations,” said Ivana Bratanić, Vice President of Agram Group.
RECORD AFTER RECORD BROKEN ON THE POLISH WAREHOUSE MARKET
At the end of 2021, the Polish warehouse sector once again proved to be the hottest commercial real estate market. According to AXI IMMO, net demand exceeded 5.4 million sqm and, as in previous quarters, was generated mainly by clients from the e-commerce and logistics sectors.
“According to our preliminary calculations, the total volume of investment transactions in the logistics and industrial sector reached a record of €3 billion. It seemed that last year’s result of €2.6 billion was a very high bar, however, investors have once again surpassed it. They are mainly interested in fully leased and well-located BIG-BOX warehouses in mature markets and the growing last-mile logistics segment, benefiting from the e-commerce boom,” comments Renata Osiecka, Managing Partner, AXI IMMO.
At the end of 2022, the Polish warehouse market is expected to reach the limit of 30 million sqm of total industrial stock, as another 4.9 million sqm is under construction.