The Polish investment market has quickly adjusted to the changes caused by the pandemic. The industrial sector took up a record-high share of investment volume in its history with 53 percent. It is a significant increase compared to the average of merely 17 percent registered before 2020. The retail market is still driven by retail parks which have been increasingly popular among investors for the past three years. However, 2021 saw eight large shopping centres being transacted, a strong rebound as compared to the previous year, when only two such schemes were traded. A smaller volume is partially caused by the lack of large retail portfolios or office skyscrapers being subject to the transaction. In exchange, more and more industrial portfolios are being traded, which are however characterized by smaller lot sizes. Avison Young expects that the next year will see a great comeback of the office sector, mainly core and core+ assets in both Warsaw and the regional cities.
€5.9 billion = total investment volume in 2021
166 transactions (record high)
80 active investors on the market
Industrial market breaking all the records
The industrial sector’s growth continued in 2021, resulting in almost €3 billion transaction volume – the highest result in history. Also, this year, compared to 2020, was characterized by increased liquidity – while transaction volume grew by 13 percent, the total number of transactions was larger by 42 percent.
“Another visible trend, which is not reflected in the volume, is significantly growing number of investors looking for JV opportunities, as investors find it difficult to acquire standing assets, and look for higher returns,” commented Michal Cwiklinski, Managing Director – Poland.
Portfolio transactions, within the industrial volume, took up 63 percent. The biggest transactions belonged to the sale of the EQT Exeter portfolio to GIC, the Nexus Portfolio purchased by CBRE IM and the Elite Partners Capital’s Portfolio acquisition by Blackstone. The strongest presence in 2021 on the industrial market was from Asian investors (almost 28 percent of the transaction volume) and entities from the USA (responsible for almost 25 percent of transaction volume).
€3 billion = total industrial investment volume in 2021 (record volume in the sector)
53 percent = share of industrial volume purchased by investors from Asia and the USA in 2021
63 percent = share of portfolio transactions in industrial volume in 2021
Office market expected great comeback of core assets
For the past few years share of office investment volume was shrinking. However in the following quarters, Avison Young expects it to change. While in 2021 number of value-add transactions exceeded core assets deals, in 2022 multiple office building transactions are scheduled to be closed and appear on the market, especially a few office towers in attractive locations.
“Also, we have observed, that over the years share of regional transactions was decreasing and now is the lowest in the last five years, said Michal Cwiklinski. “But new, core offices in Kraków, Wrocław, Poznań, Tricity and Katowice that are expected to be traded might change this situation”. In 2021 the largest transactions were acquisitions from Echo Investment of two parts of Browary Warszawskie – buildings G & H purchased by Deka Immobillien and Villa Offices purchased by KGAL. However, in Warsaw, 30 percent of office transactions took place in Mokotów – €343 million. As Avison Young points out, it is the second-best result in history right after last year’s outstanding €383 million. Among those deals, is the finalized disposal of Empark by Immofinanz to Echo Investment for redevelopment to residential.
€1.7 billion = total industrial investment volume in 2021
28 percent = transactions in Warsaw conducted in Mokotów in 2021
Shopping centres back in the game
2021 saw continuing lower investment volumes in the retail market, however, Avison Young indicates, the structure of transactions changed visibly. After shopping centre deals almost disappearing in 2020, in 2021 there were 12 large‑scale shopping centres sold in highly attractive locations in the largest cities. Those were all sold at attractive pricing with the opportunity to create value or for redevelopment. “On the other hand, the amount of retail parks acquired confirms demand for such assets, even in smaller towns,” commented Michal Cwiklinski. “Due to lack of larger retail parks in main cities, investors are turning to smaller projects in secondary locations which resulted in lower volume and high liquidity.”
41 percent = share in the number of convenience transactions in 2021
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