Value of commercial real estate grows in Poland – JLL
February 9, 2016
The year 2015 was characterized by extraordinarily high activity among real estate investors in Poland and in terms of investment volume, proved to be a record-breaking year with EUR4.1 billion of transactions concluded, the Valuation Department at international advisory firm JLL said in a report.
This is the second best result in the history of the Polish market, the report said. Investors were the most active in the retail segment where projects worth in total EUR 2.26 billion changed hands. Office projects attracted ca. EUR 1.27 billion followed by the industrial segment with EUR 473 million.
A drop in yields was registered (practically in all sectors) due to the high interest shown in the Polish real estate market by investors. This also resulted in an increase in the value of real estate in Poland.
Last year witnessed the highest tenant activity in the history of Poland’s office market. Lease agreements for approx. 1.5 million sq m were signed with Warsaw accounting for 834,000 sq m of this total.
Prime headline rents in Warsaw edged down over the course of 2015, with City Centre rents declining from EUR22–24 / sqm / month to EUR21–23.5 / sqm / month and Non-Central locations commanding rents of EUR11–18 / sq m / month. Downward pressures are applicable to effective rents, which are on average 15–20% below headline rents. Rental levels across core regional office markets leveled off in 2015. Currently, prime headline rents range between EUR11 to EUR12 / sqm / month in Lublin and EUR14 to EUR14.5 / sq m / month in Poznań, Wrocław and Cracow.
Furthermore, 2015 was also a good year for the retail market in Poland. During the last 12 months, up to 502,000 sq m of new shopping center stock was delivered to the market.
The year 2015 saw record breaking take-up as well on Poland’s industrial market with lease agreements for 2.22 million sqm concluded during the year. Average headline rents in industrial parks located out-of-town are at between EUR2.6 and 4.5 / sqm / month.