Voices from the market

Invesco Real Estate

Originally Published in March 2018

In 2017, we saw international investors continue their active investment in Poland with transactions totalling over €5,6 billion Invesco Real Estate, as one of the first real estate investment managers to actively invest domestic and international capital into the region, has transacted almost €2 billion into Poland in the past 16 years. And, as a key strategic region for our firm, we currently have 12% of our European AUM invested here in offices, retail, logistics and hotels. Warsaw remains the largest investment market within Poland, attracting both European domestic and international institutional investors.

However, the market is clearly reaching its maturity with a wide variety of transactions from sale-and-lease back, portfolio deals, JVs and IPO’s taking place. This increase in transaction activity is looking beyond the “classic” commercial sectors, into areas such as hotels and residential. In addition, new REIT legislation might provide the potential to deepen the Polish real estate investment market if properly implemented. While the latest draft plans to simply include residential, with the amount of international capital targeting the commercial sectors, we believe it would provide significant opportunities for the market should the investment remit be widened.

Logistics has increasingly become a key sector for Poland for a number of factors including location, cost advantages and a well-educated workforce. We expect to see further growth, and thus investment opportunities, in the Polish e-commerce sector as the market plays catch-up in the wider European context. This development will likely impact the local retail sector, but undoubtedly progress the expansion of logistics, which Invesco Real Estate, as a firm investing international capital in Poland, is actively interested in. The company seeks to strengthen its own Polish logistics portfolio as part of a strategic move. To date, we have acquired around 12 logistics assets in the region with a total investment volume of circa EUR 500 million.

As further yield compression in the major commercial sectors may be limited, in our view a deep understanding of the market situation and profound local expertise is a key to success, especially sourcing the right assets, in the right location at the right price, and at the right time.

Invesco Real Estate has been, and continues to be, an active player within the Polish real estate market for over 15 years, watching and analysing trends throughout the cycles and adopting its investment strategies accordingly.

Comment by Anna Duchnowska, MBA, MRICS, Senior Director – Asset Management, Head of Polish Operations at Invesco Real Estate