Interview: James Chapman is partner and head of capital markets in Central Europe at Cushman & Wakefield
by Beata Socha
Real estate investors active in Poland have easier access to capital, with loan-to-value-ratio on par with Western European countries. Does it mean it is no longer an emerging market?
We’ve moved away from being an emerging market. Investors are getting increasingly confident. Last year was the fourth consecutive year of growth in transaction volumes and we fully expect that 2014 will be the fifth consecutive year of such growth.
Is Poland becoming a core market in Europe then?
There are several key considerations: for new pan-European funds the UK, France, Germany and Poland are the core elements in many funds’ target markets. Meanwhile, certain traditional markets such as Italy and Spain are of increasing interest but are classified as peripheral markets.
Poland is up there in prime focus. We see Asian capital looking at Poland and actively bidding on assets, which is a very strong validation of the Polish market.
What kind of assets are investors targeting?
The Polish, as well as the Czech market, are becoming mature, with increasing diversity of capital and a wider range of investment deals. It is no longer just prime assets that are in demand. Equity sources are looking at regional cities for all major assets classes and with retail that extends to the top 20 cities.
Until recently all the focus has been on the top-tier cities (Warsaw, Wrocław, and, to some extent, Kraków, and retail in Katowice). Properties previously ignored are now in focus: retail and logistics schemes in sub-markets and a wider range of cities.
We can see domestic capital growing, with investors looking at value-add and opportunistic assets. All these aspects point to the fact that Poland is a healthy market and there is strong confidence among investors.
What about other CEE countries?
Interestingly, whilst the Polish investment volume continues to grow, its overall dominance in the Central European region (including the Czech Republic, Slovakia, Poland and Hungary) reduced from 80 percent in 2012 to some 55 percent in 2013. We see this as a positive trend showing the increasing liquidity of the whole region.
Where is the money coming from?
The bulk of the money is still European, that is German or UK-based money managers. But the latter bring money from all around the world, so it could be Asian and North American money as well.
In 2014 we’ll see more direct investment of Asian capital and American/Canadian. They are still likely to use a local partner such as a European money manager with experience in Poland.
How do Asian investors see Poland?
In 2013 the headline was Asian money going to the UK. This year it will move more into continental Europe. There is huge demand for key cities in Germany, there is interest in Paris but there is also strong interest in Poland.
Poland came onto the radar of Asian investors some 6-12 months ago but now investors are beginning to understand that opportunities are even greater in Poland.
We see more investors in terms of their number, but they also have more capital to spend. Importantly, their desire to spend is greater. Poland has very good opportunities and available stock.