Transcript Slide 0

The Polish Commercial
Real Estate
Market Overview
14 June 2012
www.dtz.com
Agenda
1. The Polish economy and investment market
2. Retail market
3. Office market
4. Industrial and logistic market
5. Summary
6. DTZ in Poland
1
Economy
In recent years the Polish economy has proved to have a strong macroeconomic
base as it was relatively immune to the negative situation and instability on many
European markets.
• Poland is considered as a target market among
investors.
• 6th largest economy in EU by population (38 million
people)
• EU entry in May 2004: fast development of ICT and
BPO sectors
• Diversified economy - manufacturing, light and
heavy industry, automotive and increasing share of
services
• Boost for infrastructure - Poland is to receive nearly
20% of the EU’s €308 billion structural funds for the
period 2007-2013
• Eight cities with more than 400,000 inhabitants, 17
cities with more than 200,000 inhabitants, 39 cities
with more than 100,000 inhabitants
• 4 Polish cities to host Euro 2012 championships –
Warsaw, Poznań, Wrocław and Gdańsk
2
Poland - Macroeconomic Overview
Economy in good dynamic shape
Annual GDP Growth and Inflation, 2003-2012f
%
8
7
6
5
4
3
2
1
0
2003
2004
2005
2006
2007
2008
2009
GDP growth
2010
2011 2012(f )
Inf lation rate
Gross Domestic Product
Consumer
Prices
Employment
Source: Central Statistical Office (GUS), Oxford Economics
• Poland the only country within the European Union to avoid recession in 2009: Well-capitalised financial sector, low degree of
openness of the economy and timely reactions from fiscal and monetary policies
• Strong GDP growth compared with other EU countries (4.3% y-o-y in 2011), with inflation slightly above the target
• Positive macroeconomic trends result mainly from growth of internal demand and large-scale infrastructure investments
• The Warsaw stock exchange is the largest one in Central Eastern Europe and one of the fastest growing in the world
• Acceptable level of public debt: 56.7% of Gross Domestic Product
• Due to the global macroeconomic slowdown expected in 2012, the Polish economy may also experience a decrease in GDP growth
to approximately 2.5% (-0.3% for the euro area).
3
Economy indicators
Industrial Output
Annual GDP Growth
16%
6,8%
14%
6,1%
5,3%
12%
5,1%
3,9%
3,7%
10%
4,3%
8%
3,4%
2,5%
6%
4%
1,6%
2%
FDI Inflows (€ bln)
Jan. 2012
Dec. 2011
Oct. 2011
Nov. 2011
Sep. 2011
July 2011
Aug. 2011
May 2011
June 2011
Apr. 2011
Feb. 2011
March 2011
Jan. 2011
Dec. 2010
Oct. 2010
Nov. 2010
Sep. 2010
July 2010
Aug. 2010
June 2010
2012(f )
2011
2010
2009
2008
2007
2006
2005
2004
2003
0%
Retail Sales
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Jan.
2012
Source: Central Statistical Office (GUS), National Bank of Poland, Oxford Economics
4
Road infrastructure
Legend:
Motorways completed to 2008
Motorways completed to 2010
Motorways scheduled for 2012
5
Central and Eastern Europe vs Poland
Ø Economic growth 2007 - 2011
Investment volumes*
€ mn
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
CEE* (excluding Poland)
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
Poland
Source: IVG Research/European Commission
* Czech Republic, Hungary, Ukraine,
Slovakia
• Poland far more dynamic than other CEE countries. The country has proven its position as the leading market in the CEE Region
6
The Polish real estate investment market
Investment Volumes Poland, 2000 – 2011
Investment Transaction Volume by sector, 2011
€ mn
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
7%
90
80
70
44%
60
50
40
49%
30
20
10
0
2000
2002
2004
Volume of transactions
2006
2008
2010
Number of transactions
Office
Retail
Industrial
• €2.5bn of investment transactions was recorded in 2011 representing 37% increase year on year. €1,5bn transacted in the
second half of 2011 contributing 60% to the total volume represents the strongest six months since the beginning of 2007.
• Market activity in 2012 is expected to remain polarised between core players looking for security at better price in Poland and
opportunistic players targetting 17 - 25% IRR’s, the latter group being more volatile to financing restrictions.
• Banks remain cautious but financing is available for best in class assets, including larger lot sizes via club deals.
7
Prime Investment Yields – 2005 – 2012(f)
%
9
8
7.75
7
6.25
6
6.00
5
7.75
6.25
5.75
4
3
2
1
0
2005
2006
Office
2007
2008
2009
Retail
2010
2011
2012 (f)
Logistics
• After two years of upward revision, prime yields in all sectors compressed by 25 – 50 p.p. Therefore prime office and retail yields as at
the end of 2011 were at the level of approximately 6.25 and 6.00% respectively. Prime yields in the logistics property sector stood at
7.75%. DTZ expects prime yields to remain relatively stable in the first quarters of 2012.
• Yields for the secondary assets are traded on average 100 -125 bps higher.
8
Poland – Investment highlights in Commercial Real Estate
Poland - Investment highlights
General
Economy
Real Estate
Market
• Poland has not only a large domestic market but also has developed strong growth momentum as a result of its
successful transition to a market economy. The prospects that the success story will continue are good,
considering the moderate national public debt, essential improvements to the transportation infrastructure and the
large pool of low-cost, dedicated and skilled workforce
• The Warsaw office rental market has been experiencing a steep upswing since mid 2010, leading to a considerable
reduction in the vacancy rate and a strong recovery in rent levels. The expected high demand for office space in
2012 and especially 2013 will be met by a number of potential completions
• Poland has a liquid, relatively transparent investment market characterised by international players and, due to its
relatively short history and growth dynamics, a large supply of modern and core properties.
Poland not
part of CEE
• The classification of Poland as CEE country appears out-of-date, as the individual countries of Central and Eastern
Europe have developed very differently in the last two decades. But also a comparison of Poland with Western
Europe is not adequate, because Poland is much worse off with regard to income per capita, but better positioned
in terms of economic growth and public indebtedness
In a number of international surveys, Poland is currently ranked as one of the most attractive countries in Europe for commercial real estate
investments. Reasons for this are, in addition to the broad range of investment opportunities and relatively high achievable yields, the
Polish economy’s good position as compared to other European economies and its growth prospects, which are relatively good in spite of
the sovereign debt crisis in the Eurozone
Złote Tarasy
The Polish retail market
DEVELOPERS AND OWNERS
Tesco, Metro Properties, Unibail-Rodamco, Axa,
Apollo Rida, Blackstone, Rockspring, Union Investment
Warsaw
RETAILERS
Auchan, Carrefour, Leroy Merlin, Sephora, Promod, Decathlon,
H&M, C&A, LPP, Tatuum, NG2
10
Modern retail stock in Poland
680
Total modern retail
stock in Poland:
11 m sq m
TRICITY
671
Shopping centres:
9 m sq m
390 schemes
546
POZNAŃ
570
716
Average size of
shopping centre:
23,000 sq m
ŁÓDŹ
WROCŁAW
Density in Poland:
236 sq m per 1,000
inhabitants
WARSAW
433
547
UPPER
SILESIA
KRAKÓW
sq m per thousand inhabitants
Source All Data: DTZ Research
11
The Polish retail market
Retail supply by formats, 2011
Supply split by city size, 2011
1%
13%
Over 400,000
inhabitants
200 - 400,000
inhabitants
14%
59%
14%
1%
Shopping centres
7%
Stand alone retail
warehouses
17%
Retail parks
100 - 200,000
inhabitants
Other
74%
Below 100,000
inhabitants
Factory outlets
Source: DTZ
Comments
• Large agglomerations dominate the retail market, however over the last four-five years secondary and tertiary cities have been
gaining on importance, substantially increasing their market share in the overall volume of annual retail supply.
• Around 59% of total modern retail supply is situated in 8 major Polish agglomerations with a population over 400,000.
These are Warsaw, Krakow, Silesia, TriCity, Poznan, Wroclaw, Lodz and Szczecin.
12
Evolution of the Polish retail market
GDYNIA
SŁUPSK
Stage I
largest Polish cities and
agglomerations
ELBLĄG
GDAŃSK
KOSZALIN
SZCZECIN
SUWAŁKI
GRUDZIĄDZ
STARGARD SZ.
PIŁA
TORUŃ
GNIEZNO
OSTROŁĘKA
BYDGOSZCZ
Stage II
POZNAŃ
WŁOCŁAWEK
SIEDLCE
LESZNO
GŁOGÓW
BIAŁA PODLASKA
KALISZ
ŚWIDNICA
PABIANICE
OSTRÓW WLKP.
LEGNICA
TOMASZAÓW MAZ
ŁÓDŹ
WROCŁAW
PIOTRKÓW
CZĘSTOCHOWA
KATOWICE
WAŁBRZYCH
RYBNIK
CHEŁM
RADOM
LUBLIN
KIELCE
SOSNOWIEC
OSTROWIEC ŚW.
DĄBROWA GÓRN.
OPOLE
GLIWICE
cities with population
of 50,000 to 100,000
PŁOCK
KONIN
ZIELONA GÓRA
LUBIN
Stage III
BIAŁYSTOK
WARSZAWA
INOWROCLAW
JELENIA GÓRA
ŁOMŻA
LEGIONOWO
GORZÓW WLKP.
cities with population
of 100,000 to 400,000
EŁK
OLSZTYN
ZAMOŚĆ
TARNOBRZEG
BYTOM
CHORZÓW
STALOWA WOLA
TYCHY
RACIBÓRZ
JASTRZĘBIE ZDRÓJ
KRAKÓW
TARNÓW
OLKUSZ
BIELSKO-BIAŁA
KĘDZIERZYN-KOŹLE
NOWY SĄCZ
MIELEC
PRZEMYŚL
RZESZÓW
13
The Polish retail market
Vacancy rate in major cities, End of 2011
Annual supply split by city size
sq m
5
1,200,000
%
4.5
1,000,000
4
800,000
3.5
600,000
2.5
400,000
2
3
1.5
1
0
0.5
Over 400,000
200 - 400,000
100 - 200,000
Wroclaw
Warsaw
Tricity
Szczeci
n
Silesia
Poznań
Łódź
0
Kraków
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012f
200,000
Below 100,000 inhabitants
Source: DTZ
Comments
• 50% of supply delivered in 2010 was situated in eight major Polish agglomerations with a population over 400,000. In 2011 it oscillated around
25%.
• New stock delivered in 2011 amounted to ca. 740,000 sq m, what indicates around 35% increase in comparison to 2010.
• DTZ notice growing interest of landlords in redevelopment and repositioning activities as large part of the stock is already over 10-years old
• Retailers are still picky when it comes to new projects, but more confident about expansion plans. Food and DIY chains, as well as established
fashion brands and new entrants are very active.
14
The Polish retail market: opportunities
Prime Retail Rents
Modern Retail Space mix
100%
TriCity
Silesia
Warsaw Wroclaw
Stand alone retail warehouse
Large scale operators in shopping centres
Shopping malls within shopping centres
Retail parks
Outlets
Łódź
Poznan Szczecin
Wrocław
Lodz
Tricity
Krakow
Szczecin
0%
Poznan
20%
Kraków
40%
Upper Silesia
60%
Warsaw
€ per sq m
per month
100
90
80
70
60
50
40
30
20
10
0
80%
Comments
• Wrocław, Warsaw, Poznań and TriCity are the most developed markets in terms of operating formats.
• 51% out of over 6,5 million sq m located in eight major agglomerations is occupied either by large scale big boxes (food operators, DIY,
electronic appliances etc.) located as stand alone projects or in shopping centres.
• Prime rents remain stable, while secondary properties are under strong retailers’ pressure.
15
The Polish retail market: forecasts
Prime yields
Prime retail rents
month
/ sq m /
%
12%
120
10%
100
80
8%
60
6%
40
4%
20
2%
Warsaw - shopping centres
Warsaw - high streets
2015f
2014f
2013f
2012f
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2004 2005 2006 2007 2008 2009 2010 2011 2012f 2013f 2014f 2015f 2016f
2000
0%
0
2001
€
Source: DTZ
• Saturation in large cities calculated per pure population, yet niches
• Letting in mid and small sized cities difficult
still available
• Small formats on the move (small retail parks, convenience centres)
• Strong development pipeline 2012-14 but slowdown foreseen beyond • Vacancy differentiation: large agglomerations – low at around 2-3%,
2014
followed by secondary – 5-7%, and tertiary – 5-10%
• Rents stable for properly positioned urban malls, others facing rental • Repositioning gaining on importance
decline, especially in effective rents (large fit out contributions, etc)
• Luxury niche still not popular – failure of Likus
• Decreasing space of hypers (lease surrenders)
• Ecommerce as a threat to traditional shopping
• Extensions of established schemes – Piaseczno Auchan, Bielany
Wrocławskie, Janki
16
Rondo I
The Polish office market
INVESTORS
Deka Immobilien, CA Immo, Immofinanz, Heitman, SEB,
Arka, RREEF, ING REIM, Polonia Property Fund, PZU AM
Warsaw
DEVELOPERS
GTC, Ghelamco, Echo Investment, Skanska Property Poland,
Liebrecht&wooD, Karimpol, Swedeprop, Dantex, Hochtief Project,
Development, AIG/Lincoln, ECI
17
The Polish office market
3,600,000 (64%)
Stock End 2011
TRICITY
355,000 (6%)
256,000 (5%)
POZNAŃ
375,000 (7%)
WARSAW
244,000 (4%)
ŁÓDŹ
WROCŁAW
271,000 (5%)
516,900 (9%)
Overall stock – 5,6
mln sq m
KATOWICE
KRAKÓW
Source All Data: DTZ
18
The Warsaw office market
Stock, End 2011
(34%)
1,207,335
(27%)
954,430
(16%)
588,918
(7%)
261,357
City
Upper
Centre + South
Core
South
West
Overall stock – 3,6
West
(5%)
(4%)
(4%)
(3%)
166,874
149,596
144,016
124,475
East
Lower
South
South
East
North
mln sq m
Vacancy rate – 6.7%
Source: DTZ
19
The Warsaw office market
Annual new Supply and Take-up, 2000-2012f
New Supply, 2011
sq m
500,000
7%
450,000
400,000
33%
350,000
300,000
South West
30%
250,000
Upper South
200,000
City Centre + Core
150,000
100,000
East
50,000
Supply
2013(f )
2012(f )
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
30%
Take-up
Source: DTZ
Take-up, 2011
1%
2% 2%
7%
City Centre + Core
35%
Comments
• 120,100 sq m of modern office space was completed in 2011,
Upper South
South West
22%
Lower South
which is the lowest value recorded so far on the Warsaw market.
West
• Demand is strong with several significant transactions in progress.
• Buildings located in the Upper South, City Centre and South West
East
South East
are still the most attractive for occupiers leasing new office space.
31%
20
The Warsaw office market
Vacancy levels, End 2011
Annual Vacancy Levels, 2000-2012f
%
South East
25
Upper South
20
West
15
North
City Centre+Core
10
South West
Lower South
5
East
Average
Source: DTZ
Central
5.52%
6.23%
6.62%
6.70%
6.95%
11.46%
12.07%
2012(f )
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
2.71%
Non Central
Source: DTZ
Comments
• Availability oscilating around 6-7%. It is likely to remain relatively stable till the end of 2012.
• After 2012 – possible growth of the vacancy ratio.
21
The Warsaw office market
Prime Headline Rents, End 2011
Prime Headline Rents, 1998-2012f
€ / sq /
month
35
Core
City Centre
30
West
25
North
20
Upper South
15
South West
10
South East
Lower South
5
East
Central
2012(f)
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
€ per sq m
per month
Non Central
Source: DTZ
Source: DTZ
Comments
• Prime asking rents in the city centre stabilized at €25-27 per sq m per month (300-325 €/sq m/year).
• In non central locations they are at a level of €14-16 per sq m per month (168-192 €/sq m/year).
• Till the end of 2012 rents are likely to remain stable.
22
The regional office market
Office stock, End of 2011
Existing and pipeline supply
700,000
5%
600,000
4%
5%
500,000
Warsaw
6%
Kraków
400,000
Wrocław
7%
300,000
200,000
Tricity
Katowice
9%
64%
100,000
Poznań
Łódź
0
Kraków
Wrocław
Stock 2011
Tricity
Poznań
New supply 2012(f)
Katowice
Łódź
New supply 2013(f)
Source: DTZ
Annual supply
300,000
250,000
Comments
200,000
• Office market in Poland is dominated by Warsaw with 64% share
150,000
Source: DTZ
2013 (f)
2011
2012 (f)
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
for 2012-2013.
0
2000
• In 2011 significant drop in annual supply levels. Strong pipeline
50,000
1999
Kraków (516,900 sq m) and Wrocław (375,000 sq m).
100,000
1998
• Among regional markets, the largest office supply is located in
Until 1997
in a total stock.
23
The regional office market
Annual vacancy levels, 2006-2011
Vacancy rates, End 2011
Wrocław
25%
5.0%
20%
5%
Łódź
22.7%
Source: DTZ
Łódź
Tricity
H2 2011
H1 2011
H2 2010
H1 2010
H2 2009
9.9%
H1 2009
0%
9.2%
H2 2008
Katowice
8.6%
H1 2008
Poznań
10%
H2 2007
Tricity
15%
7.8%
H1 2007
Kraków
6.7%
H2 2006
Warsaw
Kraków
Wrocław
Katowice
Poznań
Prime headline rents, End 2011
Łódź
Katowice
Comments
• Apart from Łódź and Wrocław, the vacancy rate in all analysed
regional cities dropped throughout 2011
• Prime asking rental levels vary from €12-16.5 per sq m per
month.
Poznań
Tricity
Wrocław
Kraków
10
Source: DTZ
12
14
16
18
€ / sq m /
month
24
The Polish office market: forecasts
Comments
Office prime yield
Regional cities
• Wrocław and Krakow still dominate, but TriCity is catching up
%
16
specialising in ITC (information, technology and communication),
Łódź lagging behind
14
• Rents remaining flat with stable vacancy
12
10
8
6
4
2
Warsaw
2016(f)
2015(f)
2014(f)
2013(f)
2012(f)
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
0
Regional cities
Comments
Warsaw
• Further concentration of business clusters
(Core, area bordered by Prosta/Towarowa, Służew Przemysłowy –
Mokotów and along Żwirki i Wigury)
• Many office towers planned in the centre – large pipeline but only 1-2
could succeed over the next 3-5 years (planning constraints and lack
of financing
• Substantial levels of new deliveries planned for 2012-2014 –
downward impact on rents both in CBD and non central locations
• Strengthening of metrolines importance for the development of office • Vacancy should not exceed 8-10% as demand is still sustainable and
areas – rental differentiation
large occupiers are on the move
• Going “green” is on the radar screens more often
Source: DTZ
25
Panattoni Park
Poznań
The Polish industrial and logistic market
INVESTORS
Valad, CA Immo, NBGI, Hines
DEVELOPERS
Prologis, Panattoni, SEGRO, MLG Group,
Point Park Properties, Goodman
26
The Polish industrial and logistic market
Major industrial and logistic hubs in Poland
Stock split by regions, Q4 2011
2% 2%
2%
140
Tricity Region
Warsaw Zone 1
9%
Poznań Region
Greater Warsaw
19%
Warsaw Zone 2
Warsaw Zone 3
16%
Poznań Region
Lower Silesia
840
2,700
920
680
Central Poland
Lower Silesia
1,300
Upper Silesia
Central Poland
10%
15%
12%
Upper Silesia
Krakow Region
Tricity Region
13%
Other Regions
Kraków Region
150
Source: DTZ Research
*numbers on the map show total stock (‘000 sq m) at the end of 2011
Source: DTZ Research
• Total industrial and logistic stock in Poland at the end of Q4 2011 was estimated at 6.9 mn sq m. Approx. 40% of the stock is located within
Greater Warsaw area including three zones – Warsaw Zone 1 (within the city limits), Warsaw Zone 2 (approx. 15-30 km from Warsaw
centre) and Warsaw Zone 3 (approx. 30-50 km from Warsaw centre).
• Among the largest regionals market there are: Upper Silesia, Central Poland, Poznań Region and Lower Silesia
27
The Polish industrial and logistic market
sq m
New supply (sq m)
Take-up (sq m)
2011
2010
2009
2008
2007
2006
2005
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
2004
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Vacancy rate*
Source: DTZ Research
• Developers focused on pre-let and BTS projects which resulted in a substantially low level of new supply (approx. 350,000 sq m in 2011).
Taking into consideration level of space under construction we expect higher level of deliveries in 2012.
• Record level of take-up, including new agreeements as well as renegotiations, in 2011 (1.8 million sq m) which is a 20% increase y-o-y.
• Constant decrease of vacancy rates – from 18.0% at the end of 2009 to 11.7% at the end of 2011 resulting from strong take-up and very low
level of speculative developments
• Prime headline rents oscillating from €5.20 per sm per month (62 €/sq m/year) in Warsaw Zone 1 to € 3.8 – 4.0 per sq m per month (45.6-48
€/sq m/year) in Warsaw Zone 2, Upper Silesia, Tricity Region and Krakow Region to €3.10 – 3.30 (37-40 €/sq m/year) in other major regions.
28
The Polish industrial and logistic market: forecasts
Prime headline rents (€ per sq m per month),
Prime yields, Greater Warsaw
Greater Warsaw
6
2016 (f )
2015 (f )
2014 (f )
2013 (f )
2012 (f )
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
5
2000
2016 (f )
4.5
2015 (f )
7
2014 (f )
4.8
2013 (f )
8
2012 (f )
5.0
2011
9
2010
5.3
2009
10
2008
5.5
2007
11
2006
5.8
2005
12
2004
6.0
2003
13
2002
6.3
2001
%
2000
€ / sq m /
month
Comments
• Supply correlated with demand – continuation of BTS model
• Few spec with stable headline levels.
Source: DTZ
29
Warsaw
Summary
30
Poland is an attractive market for property investors
Continuation of Polish economic success story: Moderate public debt, infrastructure
improvements etc.
Classification as CEE country out-of-date: Poland much more dynamic and larger than other
countries
Warsaw office market extremely dynamic both on demand and supply side: More balanced in
2012/2013
Regional office markets maturing thanks to BPO, but relatively volatile due to their limited
market size
High investment volume in spite of limited stock: High share of modern commercial properties
31
Warsaw
DTZ in Poland
32
DTZ in Poland
Investment, land
and hospitality advisory
Established in 1994 in Warsaw
Office
Over 280 professionals
326,000 GLA sq m under current
leasing [office, retail, industrial]
Valuation
Industrial and
logistics
2,500 lease contracts under
management in 42 properties
3,200,000 GLA sq m in valuation
within the last 12 months
Consulting & Research
Project and Building
Consultancy
Retail
Property and Asset
Management
33
Thank you
for your attention
Patrick Delcol
Country Head
Poland
DTZ Polska Sp. z o.o.
Lumen / Złote Tarasy
ul. Złota 59
00-120 Warszawa
www.dtz.com
tel. +48 22 222 3000
fax +48 22 222 3001
[email protected]