Historically, the largest number of transactions has been always closed during the fourth quarter, when investors focused on closing transactions started throughout the year. Although a positive sentiment is observed, and more and more investors are sourcing new transactions across Poland, it might be difficult to close all of them before the year-end. Also, transaction volume will obviously depend on lifting travel restrictions across Europe.

Newcomers believe in Poland’s resilience

Half of the investment volume (€1.75 billion) that came to the Polish market during the first six months of 2020 came from newcomers, i.e. investors that were not present on the Polish market before. We have seen an inflow of capital from both nearby countries, such as Czechia, France or Hungary as well as from more distant regions, including Lebanon, Singapore or the Republic of South Africa. It is worth noting, that despite the global pandemic situation, transactions closed by newcomers in H1 2020 only, accounted for 146% of the total 2019’s result – point out Avison Young.

Office sector still strong

The office sector maintained its momentum, with €1.4 billion invested throughout the first half of the year, slightly less than during the corresponding period of 2019 when €1.7 billion was transacted. Both the Warsaw market as well as regional cities have seen multiple transactions. Additionally, Lone Star sold to Hungarian Optima Investment its majority stake in GTC which owns a significant portfolio of office properties across Poland.

Retail – Difficult, but why not?

The first half of the year saw multiple retail transactions being closed, and as expected, the majority of these took place during the first quarter. However, there were some retail closings after the coronavirus pandemic outbreak - these were mainly convenience schemes, standalone, food-anchored objects, with a significant part of them having redevelopment potential – observes Avison Young. Although this was not a typical investment property transaction, it is worth noting that acquisition of Polish activities of Tesco by Danish Salling Group, owner of Netto brand has been closed in June, what will surely have a significant influence on the retail investment market in Poland.

Industrial market soaring – Dirven by portfolio transactions and corporate/platform takeovers

Almost €1.7 billion transacted in the industrial sector during the first half of the year already outperformed full 2019 result by 9%. This exceptional volume was driven mainly by large portfolio transactions, or corporate/platform takeovers, such as Goodman’s disposal of CEE activities to GLP or transfer of 46.5% shares in European Logistics Investments platform managed by Griffin Real Estate from Redefine Properties to Madison International Realty. The COVID-19 pandemic even boosted the already immense demand for Polish logistics assets and currently, it seems that the major potential obstacle in growing industrial investment volumes might be a scarcity of high-quality product available on the market to be purchased.

What’s next?

Taking into consideration the current situation, it is difficult to estimate any particular investment volumes for the second half of the year. However, Poland has been perceived as one of the countries to come out almost unscathed from the global turmoil. Multiple investors confirm such approach, as Avison Young observes positive sentiment towards Poland among them, and as they confirm willingness to invest in good quality products. According to Avison Young, more and more LOIs are being signed and investors are coming back to the market, albeit expecting some discount in pricing.