Boston, MA -- (ReleaseWire) -- 04/30/2014 -- Poland remains one of the stronger real estate sectors in the CEE region, however, wider economic concerns have caught up with the sector over the past few years, which have limited growth and put pressure on rental rates. With a focus on the principal cities of Warsaw, Krakow and the Tricity area, the Poland Q2 2014 Real Estate report examines the commercial office, retail, industrial and construction segments throughout the country in the context of a gradually more positive outlook for the country's economy and construction sector.
2013 saw a notable upturn in market conditions with a recovery in export volumes driving GDP growth in the second half of the year in particular. These factors added some much needed momentum to the market, giving rise to a recovery in both industrial output and consumer spending. The improving backdrop appeared filtering through into the rental market as rental rates showed signs of picking up across the three cities we monitor.
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2014 looks set to provide further improvement in terms of macroeconomic fundamentals, which will drive demand for and investment in the commercial real estate market. Our Country Risk team forecast Poland's economy to grow by 2.3% this year in real terms, which will be driven in large part by a notable uptick in export volumes as well as moderate growth in consumer spending. Underpinning our continued relative optimism for the country's commercial real estate sector is growing activity in the local construction market.
Furthermore, the growth of foreign direct investment, witnessed during H214 is expected to continue at a steady pace during the course of the year, which should help to re-invigorate the commercial real estate sector as it continues to suffer the after effects of the global financial crisis.
While rental rates should remain steady across all three segments of the real estate sector, we caution that growth will continued to be challenged by cautious tenant demand amid a climate of uncertainty. While there is some scope for growth in rental rates in 2014, our core view is for rates to remain broadly stable over the course of the year with potential for marginal decreases in some cases.
- US-based investment management company Invesco signed a purchase agreement with European real estate development company Globe Trade Center for the acquisition of Galeria Kazimierz in Krakow, Poland. The shopping centre is developed on two levels and covers an area of 38,300m2.
- Q114 also saw Valad Europe and Unibail-Rodamco announce plans to redevelop and extend the Krokus Shopping Centre in north eastern Krakow. Some 50,000 m2 of gross leasable area will be added and the property, part of Valad Europe's Polish Retail Fund, will be transformed into a state-of-the-art jumbo shopping centre. It currently has a total gross leasable area of 30,000 m2.
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