According to a recent report published by Cresa, portfolio transactions are on the rise on the Polish retail market.
Two of last year’s three largest commercial real estate transactions were retail portfolio deals: the €600M acquisition of the shopping centre portfolio from Cromwell Polish Retail Fund by Cromwell Property Group and the disposal of Atrium Koszalin and Atrium Felicity to ECE Group for €298M.
The Polish commercial investment market volume reached €7.57bn in 2019. The retail sector turned over €1.92bn, accounting for more than 25 per cent of the investment total and posting an average annual growth of 7.5 per cent in 2010-2019.
Retail assets accounted for 25 per cent of last year’s total commercial real estate investment volume. In 2019, the retail sector lagged behind the office sector, which accounted for as much as 50 per cent of the total investment activity.
Although single asset transactions continue to dominate the retail investment market, the share of portfolio deals is steadily rising. The annual growth in portfolio transactions averaged 20.9 per cent in 2010-2019. This significant increase results from the low base effect (two retail portfolio deals in 2010 versus 11 in 2019). In 2019, as in the previous year, deals ranging between €500M – €1bn had a considerable share of the retail investment volume. In 2019, prime Polish retail yields held firm at 4.9-5 per cent.
“Investors’ interest in retail assets remains strong. Recent years have shown that the retail market’s growth will be driven mainly by large portfolio deals. Looking ahead, investors will target dominant retail schemes in Poland’s key cities and schemes that are successfully adapting to changing demographics and shopping habits of consumers who expect increasingly enjoyable shopping experiences,” says Paweł Nowakowski, Head of Capital Markets at Cresa Poland.
