Poland Real Estate Report Q1 2014 - New Market Report

From: Fast Market Research, Inc.
Published: Fri Feb 07 2014

Poland remains one of the stronger real estate sectors in the CEE region, however, wider economic concerns have caught up with the sector over the past few years, which have limited growth and put pressure on rental rates. With a focus on the principal cities of Warsaw, Krakow and the Tricity area. 2013 saw a notable upturn in market conditions with a recovery in export volumes driving GDP growth in the second half of the year in particular. These factors added some much needed momentum to the market, giving rise to a recovery in both industrial output and consumer spending. The improving backdrop appeared filtering through into the rental market in H113 as rental rates showed signs of picking up across the three cities we monitor.

2014 should provide a further improvement in terms of macroeconomic fundamentals. The economy as a whole is forecast to grow by 2.3% in real terms, according to our Country Risk team's latest outlook. Underpinning our continued relative optimism for the country's commercial real estate sector is growing activity in the local construction market and an increase in pipeline dynamism which should help to reinvigorate the commercial real estate sector as it continues to suffer the after effects of the global financial crisis.

Full Report Details at
- http://www.fastmr.com/prod/768399_poland_real_estate_report_q1_2014.aspx?afid=301

While rental rates should remain steady across all three segments of the real estate sector, we caution that growth will continued to be challenged by cautious tenant demand amid a climate of uncertainty. While there is some scope for growth in rental rates in 2014, our core view is for rates to remain broadly stable over the course of the year with potential for marginal decreases in some cases.

Recent Developments:

* In December 2013 real estate developer OKRE secured a building permit for a grade A office building in the Ochota area of Warsaw. The move will expand the company's portfolio in Poland, adding 7,400 square metres of rental space to its existing Polish portfolio. The eight-storey property has been designed by architectural company Kurylowicz & Associates and will be constructed on land owned by the Polish developer.
* In the industrial sector, Q413 saw Segro European Logistics Partnership (SELP) acquire a portfolio of 10 logistics properties, nine of which are located in Poland and one in the Czech Republic, along with an additional 520,000 m2of land. In support of the acquisition, pbb Deutsche Pfandbriefbank and Helaba have provided a EUR188mn (US$259mn) five-year secured loan to SELP.

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