Boom here and boom there

The investment and residential markets are the most exciting territories for real estate people nowadays. Let\'s have a quick look at the first one: the total value of investment transactions in Central and Eastern Europe in 2005 rose by 39 pct to EUR 5.8 bln and investment coming to Poland represented almost 50 pct of last year\'s total! The amount of money yet to be spent in CEE markets is still very significant and yield compression seems set to continue this year at least. The only \'problem\' is the lack of high quality investment products, so it is little wonder that Rondo 1 (a landmark office building in Warsaw\'s city centre) has been sold already... twice - and it was only officially opened a month ago and hasn\'t been fully leased yet. The new owners, who closed the EUR 260 mln deal at the beginning of April, are London & Regional Properties.
The residential market is also booming. According to some analysts, if the economy remains healthy and 7 pct VAT for flats stays the same until 2011, developers shouldn\'t start to worry before 2010 at the latest. Many players would like to benefit from this situation, so now the trend is for commercial developers to go residential. But this is only part of the story - new big investors are coming. In March we witnessed the entrance of Pirelli Real Estate, who have finally acquired a 75 pct stake in Pekao Development. They have come to conquer the market. Watch this space ...

Magda Konstantynowicz
Editor