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Investment Market Report by Avison Young | H1 2020 in Poland

First half of 2020 saw a record high investment activity with EUR 3.5 billion of investment transactions closed, including pending transactions at final stage. Although this has been a 30% better result than during the corresponding period last year, achieving this year a similar result to record-breaking volume of EUR 7.8 billion registered last year may be difficult – according to Avison Young.

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 that came to the Polish market during the first six months of 2020 came from the newcomers – investors that were not present on the Polish market before. We have seen inflow of capital from both nearby countries, such as Czechia, France or Hungary as well as from more distant regions, including Lebanon, Singapore or 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.

RETAIL – DIFFICULT, BUT WHY NOT?

First half of the year saw multiple retail transactions being closed, and as expected 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 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 retail investment market in Poland.

WHAT’S NEXT?

Taking into consideration 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.

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