It’s become pretty commonplace to say that Warsaw’s office market is in trouble, that the pipeline is just too big and that the country’s economic boom was all just an offshoot of a binge of EU-funded road-building. The truth will turn out to be far more subtle and complex.
As we’ve been told ad naseum, Poland is long in smart, ambitious young people with highly marketable skills in finance, technology and languages, it’s also just plain big. European-big. And this is part of the reason the Warsaw Stock Exchange has quietly become one of the more attractive markets in Europe. Immofinanz didn’t just double-list there for marketing purposes, after all. It wants Polish pension fund money.
Anyway, the next time someone tells you Warsaw’s office market is past its peak, send them to links like this article.
Record stock sales and a growing economy are helping Poland solidify its position as central Europe’s busiest financial center, even as euro-area neighbors struggle to shake the sovereign-debt crisis. UniCredit SpA (UCG), JPMorgan Chase & Co. (JPM) and Societe Generale SA (GLE) are establishing investment-banking hubs in Warsaw, where equity sales of 15 billion zloty ($4.6 billion) this year exceed the $490 million in the rest of central Europe.
Get it? If that doesn’t make the doomsayers think twice, give them the link to this article: SocGen’s Russian Unit Said to Cut Hundreds of Jobs in Moscow.
It’s tough to think of many more important transactions that could take place in Central Europe than one involving the Warsaw Financial Center. And that’s exactly what was announced today, with co-owners CA Immo and Pramerica Real Estate Investors agreeing provisionally to selling the asset to Allianz and Curzon Capital Partners III, a fund managed by Tristan Capital. JLL and Colliers advised the vendors on the deal, who acquired the building originally in 2005. The two held 50% shares each in the 50,000 sqm asset, but in the new arrangement, Allianz will hold 87.5%. The sale price was announced to have been €210m.
“Our investment strategy calls for 7-10 % of the overall portfolio to be sold every year in order to take maximum advantage of positive market phases and generate profits,” says Bruno Ettenauer, Chief Executive Officer of CA Immo. “Capital released in this way is earmarked for debt reduction and the realisation of current development projects. We are looking forward to the successful sale of the Warsaw Financial Center, which has now been agreed. This transaction will have a significantly positive impact on the annual result for 2012.”
Following a severe storm and what from pictures looks like at least localized flooding, there’s been a partial roof collapse at Galerie Gniezno. The building’s operator Apsys said that water had collected too quickly to allow drainage, leading to some portion of the roof caving in. The building was evacuated and has been closed to the public, with structural experts now in the process of determining the full extent of the damage. In a statement, Apsys says the building, which was opened in 2005, undergoes technical inspections twice a year, and is managed according to the requirements of Polish law. Something, however, must have gone amiss for such an even to take place, though there’s no way to even begin speculating what that might be without further information. Some initial images available here.
What’s most important, of course, is that at this point no one seems to have been hurt, but once again, a good deal of luck seems to have been involved. It would be naive to keep relying on good fortune, though, as supplies are notoriously limited.
Not bad news at all for Warsaw. Confirming an ongoing trend in which the Polish capital is becoming the financial center of CEE, UniCredit has just announced it will be making the city its regional hub. Office developers will be rubbing their hands in anticipation at the news, because the company will be hiring lots of people to make this happen. Fox has the full story:
Unicredit CAIB Poland will handle all central European business with the exception of Turkey and Russia, Jacek Radziwilski said, adding that the Warsaw office will address more local client needs. The Unicredit subsidiary includes a brokerage, corporate finance arm and capital markets unit.
“The situation on global capital markets means many people are moving,” Radziwilski said, when asked whether it would be hard to convince potential employees to move to Warsaw. “Lots of people in the City [of London] are looking for work right now.”
Segro Industrial Park Tychy in Poland has a new tenant, following the conclusion of a lease deal with Top Plastics Poland for nearly 2,800 sqm of warehouse and production space. The company develops and produces automobile components for companies such as Fiat Auto and Denso. It’s moving into an industrial development that should eventually offer 56,000 sqm of leasable space, located 22 km from Katowice. Cushman & Wakefield advised the landlord in the transaction.
Top Plastics Poland has leased almost 2,800 sq.m of warehouse and production space with an office and social unit in SEGRO Industrial Park Tychy.
Savills announced it has been selected to manage two Warsaw office buildings, Harmony Office Centre and Tulipan House, by the German fund Commerz Real Investmentgesellschaft. Its team will work with the buildings’ existing occupiers and will assist in finding new tenants for remaining vacant space. Harmony Office center is a 19,267 sqm building almost entirely leased to Millenium Bank, while Tulipan House, an 18,600 sqm office building in Mokotów, currently has 1,302 sqm available for new tenants. For both properties Savills property management team will coordinate technical services, commission work and repairs, manage rent and service charges and monitor insurance issues.
Hines has closed its most recent property investment vehicle focusing on Poland and Russia, a €900m Luxembourg-based fund that’s been collected €390m in capital. The money’s come from a range of financial institutions, sovereign wealth funds, pensions, trust and other investors from around the world. The fund will take advantage of Hines’ local teams. Its Polish office led by Mietek Godzisz, while Lee Timmins leads the Russian operation. Around 20 percent of the acquisitions are planned to be made in Poland, with the rest to take place in Russia. Equity has already been placed in three Russian assets.