Poland Real Estate Industry Update Quarter 4 2011

  • October 2014
  • -
  • Business Monitor International
  • -
  • 68 pages

Generally low vacancy rates, stemming from a good balance between demand and supply, saw the commercial property industry in Poland remain relatively healthy throughout the global financial crisis. Now, with an grow ing economy, led by goods exports to Western Europe and bolstered by domestic factors, the industry has every reason to be confident.
Foreign direct investment in the segment is significant and most of the key players in the development sphere are transnational industry players that operate across the region. Even so, many are openly stating that Poland is their best industry at the present time.
Key factors affecting the real estate market include:
- There are a number of projects either planned or under construction, but not so many as to create a potential glut of new property coming onto the industry in the next few years.
- The economic fundamentals are attractive. We are expecting real Gross Domestic Product to grow by 4.6% in 2011 and exports by a very solid 8.2%.
- The building of new infrastructure – including roads, rail and the Warsaw metro line – across the country has opened up viable new areas for all segments of the property industry .
- Poland’s office real estate segment currently has one of the best prospects in the world, according to research by Jones Lang LaSalle. There is sustained demand, including from service providers who are already established or are looking at expansion. In the retail property segment, growth is fuelled by high retail revenues . As consumer confidence is on the rise, so is consumer spending. In April 2011, retail revenues (annualised for January-April) increased by 9.5% year-on-year. Poland’s industrial property segment is experiencing a pick-up in development activity, driven by increasing retail revenues and industrial production.
The risks for the real estate industry are essentially economic: - As growth is based on exports, should the external economic picture deteriorate more quickly than we currently expect, this would have a deleterious effect on the Polish economy (and naturally its need for commercial space).
- The fiscal deficit rang in at almost 8.0% of Gross Domestic Product in 2010. While not our core scenario, should the government find itself in breach of the constitutionally mandated public debt limit of 55% of Gross Domestic Product, this would prompt harsh fiscal austerity measures, in turn putting the positive economic outlook at risk.
- There remains a risk that nascent inflationary pressures in Poland (which hopefully peaked in May) could force the central bank to pursue a more aggressive monetary tightening cycle than we currently expect. This would obviously impact on the availability of finance for property investment.

Table Of Contents

Executive Summary .. 5
Industry SWOT Analysis 7
Poland Real Estate/Construction SWOT 7
Poland Economic Environment and Risk Analysis .... 7
Poland Business Environment SWOT .... 8
Real Estate Industry Overview .. 9
Data : Poland’s Real Estate Industry - Rental Costs, 2010 And 2011 (m2/month, Euros ) ... 9
Data : Poland’s Real Estate Industry - Net Yields, 2011 And 2012 (%) . 10
Data : Poland’s Real Estate Industry - Terms Of Rental Contract/Lease, Mid-2010 .. 10
Data : Poland’s Real Estate Industry - Available And Vacant Space, Mid-2010 (m2) 11

Market Projection Scenario ... 12
Data : Poland’s Real Estate Industry - Rentals, 2010 And 2012 (m²/month, Euros ) .... 13
Data : Poland’s Real Estate Industry - Net Yields, from 2008 to 2015 (%) ... 13
Construction And Infrastructure Outlook . 14
Data : Poland’s Construction And Infrastructure Market, from 2007 to 2015 . 14
Data : Poland’s Construction And Infrastructure Market, from 2012 to 2020 . 15

Macroeconomic Data .. 17
Data : Poland - Economic Activity, from 2008 to 2015 .. 19

Environment Overview 20
Data : BMI’s Business And Operation Risk Ratings 20
Data : BMI’s Legal Framework Rating .... 22
Data : Labour Force Quality 25
Data : Foreign Direct Investment Inflows Into Central And Eastern Europe, from 2006 to 2008 ... 26
Data : BMI’s Trade And Investment Ratings . 28
Data : Poland’s Top Export Destinations, from 2002 to 2009 (US$mn) .. 29

Competition Overview .... 31
Company Profiles .... 32
Atlas Estates 32
Plaza Centers NV ... 34
TriGranit . 36
BMI Methodology .... 38
How We Generate Our Market Projections .... 38
Construction Market . 39
Bank Lending .... 40
Sources ... 40

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