Hitting new heights

The high yields seen 3 to 4 years ago are now likely to fall to around 5.49 pct for offices in Warsaw and 5.9 pct for the retail sector by the year’s end, according to CBRE’s predictions. This situation has led to a growing trend for ‘secondary transactions’, whereby properties bought earlier at a higher yield are now being sold on again as investors cash in. According to Paweł Welo, director of the investment department of CB RE: “We hear everyday of new properties being put on the market – the long term and dramatic yield compression is leading owners to capitalize on the really low yields. In 2003, yields stood at 9 pct, but now are 6 pct – this represents a big profit for investors.” One example of this is that of Centrum Okęcie, originally acquired by Irish investors Caelum in early 2004 at a yield of around 10 pct and recently sold at a 6 pct yield. Secondary transactions currently amount to about 10 pct of the total invested in P