POLAND A MAGNET FOR COMMERCIAL AND RESIDENTIAL INVESTORS SAYS NEW REPORT

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View more articles View more news and articles from this website POLAND A MAGNET FOR COMMERCIAL AND RESIDENTIAL INVESTORS SAYS NEW REPORT 12th June 2007 Poland, Colliers, CRE Poland Real Estate Review 2007, Warsaw, Krakow, Romania, Bulgaria, Belarus, Ukraine The value of commercial real estate transactions in Poland exceeded €4billion last year – more than double the 2005 level – according to the Colliers CRE Poland Real Estate Review 2007 report released today. Investment activity was split 54% retail against 42% office, with some impressive industrial deals making up 4% of the commercial market. But new arrivals, such as Irish and Spanish investors, are focusing particularly on the residential market. “Developers have been bidding up land prices at an astonishing rate, with Spanish investors regularly prepared to pay top prices,” the report says. “Rates paid for large central residential plots were considered high at €800 to €1,000 per sqm at the beginning of 2006. Yet towards the end of the year, Spanish firms bought two sizeable sites in Warsaw for approximately €1,800 per sqm and €3,400 per sqm respectively, followed by the sale of 1,900 sqm to a private Irish investor for around €7,500 per sqm.” The report says quality apartments in good locations are commanding levels of more than €2,000 per sqm in Warsaw, with Krakow also seeing similar rates. Top-end flats are commanding €4,000 to €8,000 per sqm. Property Group Property Secrets put Warsaw’s impressive growth in the residential sector down to a heady cocktail of factors, including Poland's 2004 entry into the European Union, which led to increased government funding and a booming economy. An upsurge in industry attracted to Warsaw – the country's business and political hub – has generated a large number of new jobs. Albeit from a low base, residential prices have in part been fuelled by the recent introduction of 100% mortgages for locals and an excess of disposable income pushing up demand across the country, but particularly in Warsaw. Simon Tweddle, chief analyst at Property Secrets, says: "More and more people migrated to Warsaw in search of these jobs, increasing population levels, reducing unemployment and creating an excess of disposable income." The report says that while at around 5.5% economic growth topped expectations, labour shortages in certain sectors represent a cloud on the horizon. Though the unemployment level at the close of the year was still above 15%, unemployment is down and hundreds of thousands of citizens have left Poland to work in other EU countries. “Rising salaries and the flow of income from overseas workers will ensure that demand at home remains buoyant.” The Polish Government aims to assist badly affected sectors – like construction – by allowing labour from new EU members Romania and Bulgaria, as well as from neighbours Belarus and Ukraine, into the country. The report concludes that 2007 will be another year of growth. Tweddle says: "Although property in Warsaw is less affordable today than it was a year ago, I believe the fundamentals of the market are still strong and we will see long term sustained growth of 10 to 20% per annum over the next five to 10 years.”

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