In Q3, the commercial real estate investment market revived and was accompanied by a much greater optimism than during the previous periods of 2021. Logistics and industrial space are still the leaders among the sectors. An important event was again the change of ownership of the Warsaw Metropolitan office building, the value of which exceeded PLN 1 billion.

In Q3, investors spent close to €1.6 billion on commercial properties in Poland, which increased the total transactional volume in 2021, to almost €3.6 billion. The report’s authors emphasize that the achieved result is still, lower by about 10%. when compared the same period of 2021 - which was largely influenced by transactions initiated before the pandemic - however, comparing transactions from Q3 alone with the comparable period in 2020, a clear increase can be seen. It is estimated at above 50%. and can be viewed as a clear signal of recovery.

Following a very cautious and restraining period of making decisions, the past quarter brought a lot of optimism. Looking at it and assessing it widely, it cannot be said that the health crisis made the Polish market disappear from investors' radars. On the contrary, the following months showed that the domestic economy, compared to others, has solid foundations, can withstand economic turmoil quite well, and the real estate market still has a great deal to offer. The pandemic also gave some very strong development impulses, for example in e-commerce and the logistics and industrial sector, or in the smaller commercial format sector. The good end of the year, may yet herald a return to the development path in the coming years - states Mateusz Skubiszewski, Head of Capital Markets, BNP Paribas Real Estate.
Additionally, the currently ongoing transactions with a high probability of being finalized this year may bring the results generated in 2021 to be similar to those of 2020.

Healthy Warehousing

From July to the end of September, 42 transactions were concluded, of which about half related to the warehouse and logistics sector. The strong position of warehousing translated into c.a. 53% of the total value of the result achieved in Q3, 27% involves office building transactions, and 12% for retail investments with a clear dominance of transactions involving retail parks or super- and hypermarkets. 8% of investment volumes related to transactions from alternative sectors such as PRS, hotels, student or senior houses.
- In Q3, the sale of the Metropolitan office building at Piłsudskiego Square was finalised. The Warsaw market followed this transaction with a great interest. The increase in the value of one of the most recognizable and prestigious properties with renowned tenants is one of the signs of the stability of our market - states Małgorzata Fibakiewicz, Head of Business Intelligence Hub & Consultancy, BNP Paribas Real Estate.

New Course: Diversification

Q3, according to BNP Paribas Real Estate experts, indicated directions in which investors will be looking into in the near future in terms of real estate.

- The need to diversify capital, achievable capitalization rates and the various options offered by the Polish market, as well as a base in the form of developing infrastructure, low unemployment, human resources, foreign investments in many developing sectors and staying ahead of countries with the fastest growing GDP, all of this bodes well for the results in the coming years. It also indicates that Poland's investment attractiveness has not diminished - affirms Marta Gorońska-Wiercioch, Associate Director, Capital Markets, BNP Paribas Real Estate.

The report states that over 31% of the capital invested in Q3 came from North America continent and was spent mainly on office and industrial logistics projects, with a total value of nearly €500 million. Another €600 million came from Europe, with Germany leading the race. The rest of the capital involved in real estate investments in Poland came from other areas of the world.

The report’s authors, indicate that capitalization rates in Q3 remained attractive and remained at the level of the previous quarter. With regard to the best office properties, they reached 4.7%, and for the best warehouse facilities in the vicinity of Warsaw, 4.5%, while in the regions 4.75%. Retail-park owners could count on 7-9% interest rates, and 5.5-6.5% for super- and hypermarkets. Taking into account all of the upcoming transactions, Q4 may still bring with it changes, especially in the industrial and logistics sector.

Mateusz Skubiszewski
Head of Capital Markets
mateusz.skubiszewski@realestate.bnpparibas
AAG INVESTMENT q3 2021 PL
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