Our better half

In the same period contracts worth EUR 1.26 bln were finalised in the region, 70 pct of which (EUR 877 mln) was transacted on the Polish market. The mood of analysts is not optimistic, despite the fact that a few days before publishing the JLL research, Heitman announced the signing of a conditional agreement with TK Development to purchase two retail assets: Galeria Tarnovia in Tarnów and a shopping centre project in Jelenia Góra. The total value of the transaction amounts to EUR 95 mln. A few days later another investor concluded a deal - this time it was UniImmo: Deutschland, an open investment fund managed by Union Investment, which announced the acquisition of the Manufaktura shopping and entertainment centre from French partners Fonci?re Euris, Rally and Apsys. The portfolio of the German fund will now be added to by an area of 91,000 sqm, for a price of more than EUR 300-350 mln.

Appetite comes with eating
"Kulczyk Silverstein Properties Real Estate Investment Management is an entity which was established in June and is to deal with the creation of closed investment funds in order to invest in finished, fully-leased buildings. It is led by Otis Spencer and Dennis Dart, and is aimed at the acquisition of funds from institutional investors, such as insurance companies and pension funds. The first fund is to be closed in the middle of the next year. We are interested in properties located in Poland, possibly in the Czech Republic and Hungary," reveals Piotr M. Krawczyński, a board member and managing director of Kulczyk?Silverstein Properties. Within five years the gross value of assets to be managed by the KSP group is to exceed EUR 500 mln. At the end of July KSP bought two office projects from Hochtief Development Poland. Two historical tenement houses located in the heart of Warsaw, on which the investor has spent several dozen million euros, will join the Stratos Office Center building (also in the capital city), which was bought last summer. The appetite of Kulczyk Silverstein Properties continues to grow. "We are looking at a few properties and are not limiting ourselves to offices. I believe that the retail sector is interesting because the business cycle in this industry complements the office cycle," explains Piotr M. Krawczyński.

The gap widens
The Warsaw Financial Center, with a leasable area of app. 50,000 sqm, is one of the best office buildings in?Warsaw. How much do you have to pay to become the owner of this tower block? We learned the answer at the beginning of August. The building is to be bought for app. EUR 210 mln by Allianz (87.5 pct) and Curzon Capital Partners III, a fund managed by Tristan Capital Partners. CA Immo and Pramerica Real Estate Investors, which each own 50 pct stakes in the property, have now signed a preliminary sales agreement. How will these transactions impact the figures for the investment market? "The total value of investment transactions in 2012 could range from EUR 2 bln to EUR 2.5 bln, against a very good result of EUR 2.27 bln in 2011," estimates Tomasz Trzósło, the director of the CEE capital markets department at Jones Lang LaSalle. Jakub Jonkisz, head of the capital markets department at Knight Frank, agrees with him. "We estimate that the value of transactions on the Polish commercial property market will exceed EUR 2 bln for the whole of 2012. We expect that most of the transactions will be concluded in the retail sector. The best yields will not decrease below 6.25 pct in the office sector, 5.75 pct in the retail sector and 8 pct in the warehouse sector," predicts Jakub Jonkisz. Can lower end properties count on any interest? Łukasz Lorencki, a consultant in the capital markets group at Cushman & Wakefield, remarks cautiously that because of the lack of clear prospects for any improvement on the European financial markets, investor sentiment towards secondary properties will remain moderate. Consequently, the gap between yields on the best and sub-prime properties could increase only in favour of the former. "A lot points to the fact that the dynamics of the investment market in H2 will be similar to the dynamics which could be observed until now. The estimated volume of transactions in this period should be at the level of EUR 1 bln compared to EUR 946 mln in H1 of this year. As in the past the market will be dominated by few high value transactions, which will be complemented by a number of smaller contracts. A common feature of all these properties is their high and positive recognisability in their market segments," emphasises Łukasz Lorencki.

Ewa Andrzejewska