15 and still growing
Small talk
Is the Polish real estate investment market finally picking up again after being sluggish for a year or so? What caused the slump in volumes and why might they be recovering now?
High interest rates and the macroeconomic uncertainty caused a year-long stall on the Polish real estate market, which is now beginning to pick up steam again. Due to the predominance of opportunistic deals and the cautious attitude of major participants, investment volumes have declined. Nonetheless, institutional investors are beginning to re-enter the market due to the European Central Bank’s and the Fed’s interest rate reductions and the stability of market indicators.
What kind of volumes are you expecting to be transacted this year? Have they recently been revised upwards?
We ended the first half of the year with a result of more than EUR 1.7 bln. We anticipate that the Q2 2024 recovery will last for a more extended period. The ECB’s June and September interest rate reduction announcements are crucial here. These choices will benefit investors, lead to additional portfolio transfers, and ultimately provide us with an even better 2025.
What are the major deals that have been executed so far this year? Should we expect more of these and of a similar scale before the end of 2024?
The market is liquid. As of the end of H1 2024, the largest transaction was the EUR 285 mln purchase of a portfolio of six retail properties from Cromwell Property Group by Czech investor Star Capital Finance. Then, for EUR 250 mln, Sona Asset Management, a UK-origin investment company in the UK, bought a minority interest in a CPIPG subsidiary. The deal included a portfolio comprising eleven office premises and two retail assets. The warehouse sector has risen to third in the overall transaction volume due to increased interest in the office and retail sectors. However, long-term growth drivers persist in prompting investors to monitor asset opportunities inside this sector closely.
Where are the main investors coming from at the moment? And what kind of product are they interested in?
Currently, CEE, UK, Western European and US investors, institutional investors, and private equity firms are the major players on the commercial real estate market. Additionally, Polish investors are becoming more common because they have a deeper grasp of the business and are more prepared to take risks. This is especially the case given that global players are becoming more cautious. Investors are still focusing on the industrial sector and developing niches, such as SBU, PRS and PBSA, which offer competitive returns and growth potential.
What are the prospects for the legislation allowing Polish REITs to be established? How much of a game-changer could this be?
The prospects for legislation enabling Polish REIT creation are promising and could represent a significant breakthrough for the real estate market. REITs will enhance market liquidity and transparency, providing broader access to commercial real estate investments that have been reserved for wealthier investors. Introducing such regulations will allow for the acquisition of new capital, further driving market growth and strengthening institutional funds. Ensuring proper regulations concerning sponsors and overseeing the implementation of investment policies are crucial.
Axi Immo is celebrating 15 years of operations this year. How have you been marking this milestone?
We invited clients, business partners and coworkers to a mid-June cocktail party in one of the Norblin Factory complex’s restaurants to celebrate our 15th birthday. During the party, we revealed that Axi Immo would be the co-producer of ‘Vinci 2’, the sequel to the cult Polish crime comedy ‘Vinci’ (2004).
And how do you feel after over two years of working at Axi Immo? Will you also be celebrating this?
It was undoubtedly a dynamic two years. We have demonstrated our worth as a team, which I was pleased to build and lead. We immediately gained the trust of numerous foreign clients and institutions, who entrusted us to appraise their assets (as part of Axi Immo valuation and advisory). In addition, we advised on many investment transactions and obtained exclusive rights to execute new ones, allowing us to anticipate future growth confidently.
