POLAND COMMERCIAL MARKET 2017 - RESEARCH - Knight Frank
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RESEARCH POLAND COMMERCIAL MARKET 2017
WARSAW OFFICE OFFICE MARKET
MARKET IN REGIONAL CITIES WAREHOUSE MARKET
Total office stock: Total office stock: Total stock of warehouse space
5.3 4.6
in Poland:
m sq m m sq m
New supply:
13.6 m sq m
New supply:
428,000
Record-breaking new supply
275,000
in 23 projects
sq m in 53 schemes
sq m in 2017:
2.2 m sq m
Office take-up in 2017:
651,000
Vacancy rate in Poland:
5.2%
Office space under construction:
sq m
765,000
V.Offices, AFI Project 1, Kraków
sq m Net absorption:
The highest take-up in the history:
Office take-up:
430,000 sq m
3.8
820,000
m sq m
INVESTMENT MARKET
sq m
Vacancy rate:
11.7% EUR 4.9 bn
record-breaking volume
RETAIL MARKET HOTEL MARKET of invested capital in 2017
Total retail stock in Poland Record-breaking hotel rooms
occupancy rate: 38%
11.6 m sq m
53% of total transaction volume was
reached by the retail sector
the average occupancy rate
New supply in 2017
340
in Poland
381,000 sq m
Over
EUR m
the highest value of hotel
2,500
Supply under construction acquisitions in the market history
550,000 sq m new hotel rooms delivered in 2017
Vacancy rate
Total stock:
4% Over
at the end of 2017
130,700
of hotel rooms
Wratislavia Center, FLE GmbH, Wrocław
2 3
COMMERCIAL MARKET IN POLAND RESEARCH
WARSAW OFFICE MARKET
under construction, is going to be the highest
CHART 2
building in Poland and in Central&Eastern
Supply under construction by location and planning completion date
Europe upon completion. Q4 2017
In 2017, a strong activity of developers was observed on the Warsaw office market.
2017 also brought a continuation of strong
Such large volume of office space under construction has not been recorded in the Warsaw office 2018 2019 2020
tenant activity. The annual take-up exceeded
market before. New projects have been commenced mostly in central locations, especially in the vicinity 820,000 sq m. This result was 8% higher than 400 000 —
of the Daszyński roundabout. A systematic decrease of a vacancy rate is also a positive signal for the the demand registered in the previous year,
300 000 —
and slightly lower than in the record breaking
market. The decline of the vacancy rate was influenced by a strong take-up and net absorption - the
2015. Almost 80% of the annual volume was 200 000 —
highest in the history of the Warsaw office market. leased in three areas of concentration: central
100 000 —
locations (47%), Służewiec (20%) and Aleje
At the end of 2017, the total office stock in Jerozolimskie (14%). The new lease sq m 0—
Total office stock: Warsaw exceeded 5.3m sq m. Over the recent agreements in existing buildings accounted for CBD City Centre Służewiec Mokotów Jerozolimskie East Other
5.3
Corridor
year, 23 office buildings of a total area of 46% of the take-up volume while pre-lease
m sq m 275,000 sq m were completed. This result is transactions represented 17% of all
Source: Knight Frank
32% lower than new supply registered in the
record-breaking year of 2016. Over 80% of the observed in Warsaw since 2013. The decline
New supply:
new supply was delivered in non-central of the vacancy rate was influenced by
275,000
in 23 projects
sq m
locations. The largest projects completed in
2017 include: the next stage of the Business
Garden complex (54,000 sq m, Vastint
a significant net absorption which exceeded
380,000 sq m over four quarters of 2017 and
was the highest in the history of the Warsaw
Poland), West Station II (35,000 sq m, HB office market. Despite the high volume of office
Reavis), D48 (23,000 sq m, Penta Investments) space under construction, a further decrease
Office space under construction:
or Generation Park X (20,100 sq m, of the vacancy rate is expected. This is mostly
765,000 sq m
HansaInvest Real Assets GmbH).
The successful leasing process of office
due to a limited new supply to be completed in
2018, and to a take-up expected to remain at
a high level.
Office take-up: buildings completed in 2016 encouraged Lipiński Passage, Union Investment Real Estate GmbH
820,000
developers to commence new projects. At the At the end of Q4 2017, asking rents in most
end of 2017, there was 765,000 sq m of office Developers decided to commence new locations on the Warsaw office market
sq m space under construction, of which over half large-scale projects following the success of remained stable. The asking rents in prime
was constituted by projects commenced in the Warsaw Spire. The largest projects in this buildings in the Central Business District
Vacancy rate: 2017. It’s worth mentioning that over 50% of area include: Warsaw Hub and Spinnaker ranged between EUR 20-23 per sq m per
11.7%
the office space under construction is in tower Tower (both by Ghelamco Poland) or Skyliner month, while asking rents in other central
buildings. The majority of them are located in (Karimpol Polska). Additionally, the flagship locations varied from EUR 13 to EUR 21 per sq
the vicinity of the Daszyński roundabout. project of HB Reavis – Varso Place, currently Horizon Plaza, Union Investment Real Estate GmbH m per month. The asking rents in buildings
outside the city centre were quoted at EUR
10.5-16.5 per sq m per month. Effective rents
CHART 1 agreements. The remaining take-up volume volume of available space (185,000 sq m)
remained lower by 15-25% than the asking
Net absorption, annual supply and vacancy rate on the Warsaw office market represented renewals – 26% and expansions in Warsaw, following the Służewiec area
2008-2018f level.
- 11%. The largest lease agreements included: (214,000 sq m). It’s worth mentioning that
pre-lease and expansion agreements of Citi such a low vacancy rate has not been
Annual supply Net absorption Vacancy rate Service Center Poland in Generation Park X
(18,600 sq m), renewal of the Millennium Bank
450 000 — 16% CHART 3
lease agreement in Harmony Office Centre
400 000 — 14%
Office take-up in Warsaw
(18,300 sq m), and a new lease of J.P. Morgan 2012 - 2017
350 000 — 10.4% (f) Poland in Atrium Garden (15,600 sq m).
12%
300 000 — 1 000 000 —
10%
250 000 — A systematic decrease in the vacancy rate has
8% 800 000 —
200 000 — been observed in Warsaw since mid-2016.
6% 600 000 —
150 000 — Only in 2017 the vacancy rate in Warsaw
100 000 — 4% decreased by as much as 2.5 pp. to approach 400 000 —
50 000 — 2% the level of 11.7% (615,700 sq m of available
200 000 —
sq m 0— 0% office space) at the end of the year.
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f The highest decrease of vacancy rate was sq m 0—
2012 2013 2014 2015 2016 2017
f - forecast observed in central locations (by over 6 pp.),
Source: Knight Frank, PORF yet the areas still offered the second largest Source: Knight Frank, PORF
4 5
COMMERCIAL MARKET IN POLAND RESEARCH
OFFICE MARKET IN REGIONAL CITIES 2017 was relatively low (26,300 sq m), but in
2018 some 90,000 sq m out of 126,000 sq m
CHART 2
Existing stock and office space under construction
Q4 2017
identified as being under construction is
2017 brought a further dynamic development and numerous records being broken in the office expected to be delivered to the market.
Existing stock Office space under construction
market in regional cities. The highest take-up volume and net absorption as well as a stable vacancy Moderate new supply and a high tenant
1 600 000 —
level confirm a strong tenants’ interest in office space in major Polish regional cities. Positive market activity resulted in a decrease of the vacancy
rate by 5 pp. to 8.6% when compared to the
sentiments stimulate the activity of developers: new supply within recent 12 months was barely 10% end of 2016.
1 400 000 —
lower than in the record-breaking 2016, and another 1 million sq m of new office space is currently 1 200 000 —
under construction. Asking rents remain relatively stable, but the strengthening competition between 1 000 000 —
landlords causes an increase of a downward pressure on effective rates.
ŁÓDŹ 800 000 —
600 000 —
Total office stock:
KRAKÓW CHART 1
Asking rents for office space
In 2017, the total office stock in Łódź
400 000 —
4.6
expanded by 74,000 sq m, which was the
2017 was a record-breaking period in Kraków.
in regional cities second highest result in regional markets
m sq m Q4 2017
(following Kraków), which confirms a revival of
200 000 —
Upon the completion of 190,000 sq m of new
the market in Łódź. Additionally, at the end of
New supply: supply, the total office stock in the city reached
16
sq m 0 —
2017 nearly 90,000 sq m of new office space Kraków Wrocław Tricity Katowice Poznań Łódź
428,000
1.1m sq m. Further 301,000 sq m is under
construction, of which some 200,000 sq m is 15
was under construction and a few other Source: Knight Frank, PORF
sq m large-scale schemes were at different stages
scheduled for 2018. As of the end of
in 53 schemes 14 of the planning process. A high developers’
December 2017, an increase of the vacancy
rate was recorded (by 2.6 pp. when compared activity was accompanied by a strong
Office take-up in 2017: 13
demand. In 2017, lease agreements
with the end of 2016, to 9.8%), but a high EUR/sq m/month
651,000 sq m
market absorption and a record-breaking
lease volume (which exceeded 200,000 sq m)
made the vacancy increase less than it was
12
11
amounting to 58,000 sq m were signed in
Łódź, which was slightly lower than in the
record-breaking 2016, but remained at a level
Net absorption: predicted. comparable with the average result for the
430,000
10
past 3 years. At the end of December 2017,
the vacancy rate in the city accounted to 9.5%,
sq m 9
which was an increase by 3.3 pp. when
WROCŁAW 8 compared with an analogical period of the
previous year.
Kraków
Wrocław
Tricity
Łódź
Poznań
Katowice
V.Offices, AFI Project 1, Kraków
In 2017, the highest office demand in history
was noted in Wrocław – approximately
KATOWICE
170,000 sq m of office space was leased, Source: Knight Frank, PORF CHART 3
which, together with the new supply at the New suppy, take-up and vacancy rate in major regional office markets
level of some 54,000 sq m, resulted in a 2017
As opposed to other major regional markets,
decrease of the vacancy rate by 3.1 pp. to 113,000 sq m). At the same time, the vacancy
the year 2017 observed signs of slowdown on
9.4% when compared with the end of 2016 rate decreased by 2.9 pp. when compared New supply Annual take-up Vacancy rate
the office market in Katowice. Due to a lower
Although the new supply in the previous year with Q4 2016 (to 8.2%). New supply remained
250 000 — 12% activity of developers, only 17,500 sq m of new
was relatively low, the activity of developers slightly higher than the annual average within
office space was completed and less than
remains high. In 2017, office schemes recent years and amounted to 65,800 sq m.
10% 60,000 sq m was identified as being under
amounting to nearly 200,000 sq m were Additionally, further 150,000 sq m is under 200 000 —
construction. Demand was weaker than in
commenced in the capital of Lower Silesia. As construction, of which 2/3 is planned to be
8% recent years, with the lease volume amounting
a result, at the end of 2017 office stock under delivered to the market in 2018. 150 000 — to approximately 31,000 sq m. In 2017, a
construction amounted to 291,000 sq m, of
6% systematic decrease of the vacancy rate was
which slightly above 50% is scheduled for
100 000 — observed in the city. At the end of December
POZNAŃ
completion in 2018.
4% 2017, approximately 11.3% of the total stock
remained vacant, 2.7 pp. less than the
TRÓJMIASTO
50 000 —
2% previous year.
In Poznań, 2017 will go down in history due to
a record-breaking lease volume amounting to
sq m 0 — 0%
2017 has also set new records in Tricity. For 78,000 sq m, with the largest transaction in the Kraków Wrocław Tricity Katowice Poznań Łódź
Promenady Business Park – Zita, the first time in history, the office take-up has history of the local market – 25,500 sq m
Vantage Development, Wrocław exceeded 100,000 sq m (accounting to Source: Knight Frank, PORF
pre-leased in Nowy Rynek. New supply in
6 7
COMMERCIAL MARKET IN POLAND RESEARCH
RETAIL MARKET
Poland by opening two befree stores (in Stary Steady demand for retail space supported
CHART 3
Browar in Poznań and Riviera in Gdynia) and rental rates to stabilise. At the end of 2017, the
Annual supply in Poland
2013 - 2017 stores of Love Republic and Zarina in Galeria highest headline rents for the best quality retail
2017 brought the completion of several long-awaited shopping centres. Major openings took place Północna in Warsaw. Additionally, Wroclavia space in shopping centres (units of below 100
in H2 2017 and were initiated by IKEA which opened its store (33,500 sq m) in Lublin in August New schemes shopping centre in Wrocław introduced Goldi sq m) were reached in Warsaw and amounted
(fashion brand from Ukraine) as well as La to even EUR 100 per sq m per month. Monthly
2017. The following months witnessed the introductions of (among others): Galeria Północna in Extensions of existing schemes Mallorquina (home accessories from Spain) at rents for high quality space in other major cities
Warsaw (64,000 sq m), Wroclavia in Wrocław (64,000 sq m), Skende Shopping in Lublin (24,000 the end of 2017. varied between EUR 35 and EUR 70 per sq m
700 000 —
sq m) or Serenada in Kraków (42,000 sq m). Consequently, some 370,000 sq m of retail space while in mid-size markets stood at EUR 25-60.
The fast pace of the development of
600 000 — The smallest markets were quoted at EUR
was delivered in 2017 and total modern stock in Poland exceeded 11.6m sq m. e-commerce more and more often forces the
20-40 per sq m.
500 000 — brands which have been operating in
400 000 — traditional stores to open on-line stores. In 2018, the retail market in Poland is to be
some 50% of the stock is older than 10 years, However, the opposite trend has been seen affected by regulations of the new law
CHART 2 300 000 —
Total retail stock in Poland landlords of shopping centres without recently as well. In 2017, demand for retail elaborated in H2 2017 (and signed by the
Supply under construction by location
11.6
extension options more and more frequently 200 000 — space in shopping centres was created by President in January 2018) which is aimed at
Q4 2017
decide to modernize their schemes to adapt 100 000 — brands which until recently were present only banning the trade on Sundays and holidays
m sq m Medium-sized cities (100,000-400,000 inh.)
their offer to the current and future trends. on-line (e.g. iperfumy.pl) or were selling their which is to come into force on March 1st,
sq m 0 —
Small-sized cities (less than 100,000 inh.) products from temporary space 2018.
2013
2014
2015
2016
2017
New supply in 2017 It is expected that in 2018 retail developers 8 major agglomerations (e.g. militaria.pl or telakces.com).
381,000 sq m
may be even more active than in 2017. In Q4
2017, some 550,000 sqm of retail space was
under construction. Some 436,000 sq m was
6% 29% 65%
Source: Knight Frank
Supply under construction scheduled for delivery in 2018, including
550,000 sq m
Forum in Gdańsk (62,000 sq m), Libero in
Katowice (45,000 sq m) and Gemini Park in SUNDAY TRADING BAN BILL
Tychy (36,000 sq m). The largest scheme
Vacancy rate currently under construction is Galeria Młociny Date of coming into force: 1 March 2018 Selected exclusions from the bill:
4%
in Warsaw (73,500 sq m) which is set for Number of Sundays with ban • Gastronomy
opening in 2019. As much as 20% of the total on trade per month: • Bakeries, patisseries, ice-cream shops,
volume under construction is accounted for • 2018 – 2 Sundays flower shops
at the end of 2017 extensions of the existing retail schemes.
• 2019 – 3 Sundays • On-line stores
The newly delivered supply included (apart • Petrol stations
According to the Polish Retail Research • 2020 – 4 Sundays
from schemes built from scratch) extensions of • Trade in railway stations
existing schemes. Galaxy Szczecin grew by Forum, available retail space at the end of excluding specified 7 Sundays in a year
2017 accounted for 4% of the total stock. • Trade in airports
17,000 sq m, and was the largest among Source: Knight Frank
extensions completed in 2017. Investments of Over the 12 months, the rate increased by 0.5
this type accounted for some 20% of the new percentage point, which resulted from the fact
that several retail schemes still offered space Alma Delicatessen. Additionally, not all of the
supply, and the increasing share of extensions
emptied by Praktiker in 2017, while some new schemes had been 100% pre-leased
in new supply suggests the trend observed in
recent year will continue. Due to the fact that other locations struggled with units left by before their opening dates.
TRENDS IN RETAIL MARKET
The lowest vacancy rates among the major
CHART 1 agglomerations were registered in Szczecin
Vacancy rate in selected Polish cities • Dynamic development of e-commerce • As a consequence of changing shopping • Retail stock is ageing (some 50% of stock is
(2.8%), in Warsaw and Wrocław (2.9% each).
H2 2017 makes the retail sector more competitive. habits, shopping is expected to become an over 10 years old), and therefore extensions
Toruń (1.7%), Kielce (1.8%) and Bydgoszcz Brands operating off-line open their on-line experience, which is why brands are and modernisations are expected to increase.
9%
8%
(1.9%) were leaders in terms of the vacancy stores, while companies present only in the introducing the personalisation of their
7% level among medium-size markets. Internet decide to lease space in shopping products and put much attention to the design
6% • The increasing saturation of the retail
centres. of their stores’ interiors and functionality.
5% market encourages developers to seek
Demand for retail space in Poland remained
4% alternative investments and locations.
3% stable throughout 2017. The market
• The operators of shopping centres focus • Sunday Trading Ban Bill should affect the Consequently, a further development of
2% welcomed brands that had not been present in on encouraging people to spend their free tenant profile and lead to an increase of the mixed-use projects and convenience schemes
1%
Poland, which were: Freya (Stary Browar in time there, which is why more and more entertainment and gastronomy offer. is anticipated.
0%
Poznań), Hamleys (Galeria Północna in shopping centres offer social and
Warsaw
Wrocław
Szczecin
Tricity
Kraków
Łódź
Silesia
Poznań
Lublin
Białystok
Kielce
Częstochowa
Toruń
Radom
Bydgoszcz
Rzeszów
Bielsko-Biała
Olsztyn
Warsaw) as well as Nissa and Victoria‘s Secret entertainment functions.
(Arkadia in Warsaw). In Q2 2017, a Russian
fashion company Melon Fashion Group
Source: Knight Frank, PRRF debuted in Poland. It initiated its presence in
8 9
COMMERCIAL MARKET IN POLAND RESEARCH
WAREHOUSE MARKET
the high volume of space under construction,
CHART 2
reaching nearly 1.4m sq m and constituting
Leased space by location
a 5% growth when compared to 2016. Most of 2007 - 2017
2017 in the warehouse sector was another year of record-high results. A high new supply and a high construction works have started in Central
Poland, Upper Silesia and Warsaw, and
activity of developers was noted, but also the highest volume of leased space. Together with an Warsaw Regions
according to the developers’ plans,
increasing stock of warehouse space, the market observed a dropping vacancy rate and a high a significant volume of industrial space will be 4 000 000 —
activity of tenants. Moreover, the emerging markets such as Szczecin, Zielona Góra or Kielce gained delivered untill the end of 2018. 3 500 000 —
importance on the warehouse map of Poland. That is a consequence of the development of a road 2017 has also noted a record-breaking result 3 000 000 —
infrastructure, and of the availability of investment lands and workforce. Poland’s location in the heart in tenant activity. The total annual take-up 2 500 000 —
reached the level of 3.8 m sq m, which was the
of Europe and relatively low labour costs contribute to the increasing interest in the Polish market best result in the history of the Polish logistic 2 000 000 —
from mainly logistics companies and from the distribution and e-commerce sector. market, and which constituted a 23% growth
1 500 000 —
as compared with last year. Tenants were
mainly attracted to the major warehouse 1 000 000 —
concentration areas, with the largest volume
Total stock of warehouse space 500 000 —
leased in Central Poland (26% of the total
in Poland: take-up in Poland), in Upper Silesia (with 20% sq m 0 —
13.6
of share) and Warsaw (21% of take-up). The 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
largest concluded deals in 2017 are, among Source: Knight Frank
m sq m others, Panattoni BTS for Amazon in Gliwice
with 146,000 sq m, Panattoni BTS for Amazon
Record-breaking new supply in Sosnowiec with 130,000 sq m and At the end of 2017, the available space for Poland remained at the stable level of EUR
in 2017: Goodman BTS for Zalando in Łódź with lease amounted to approximately 700,000 sq m, 2.50-5.00/sq m/month, while the highest rates
2.2 m sq m
124,000 sq m.
Unabated upward trends in the warehouse
which placed the vacancy rate at the level of
5.2%, constituting a fall by 0.4 pp. when
compared with the end of 2016.
were noted within the administrative borders of
Warsaw. The rent depends primarily on the
location of a project, access to infrastructure,
sector result in a decreasing vacancy rate quality, size of leased area and length of the
Vacancy rate in Poland: despite the significant growth of total stock. lease contract.
5.2%
Waimea Logistic Park Korczowa, Waimea Holding SA, Korczowa The asking rents in all major industrial hubs in
highest activity of developers in the history of several years. The largest projects delivered to
the market. At the end of 2017, a record- the market in 2017 were, among others, the MAP 3
breaking volume of new supply and a mentioned above Amazon and Zalando in Total stock of warehouse space by location
2017
The highest take-up in the history: record-breaking volume of supply under Szczecin, H&M BTS in Bolesławiec (60,000 sq
3.8
construction were noted. During the last year, m), Castorama BTS in Łódź (50,000 sq m),
investors delivered over 2.2m sq m to the Kaufland BTS in the Kujawy region (40,000 sq
m sq m market which was a significant increase when m), and Agata Meble BTS in Piotrków
Tricity
compare with 2016 (1.1m sq m). The largest Trybunalski (43,000 sq m). 405 000 sq m
2017 has brought a nearly 22% increase of the number of new schemes was delivered in
total stock of warehouse space to the market Warsaw, which accounted for 20% of the total The market forecasts for the upcoming years
Szczecin
13.6m sq m
in Poland, which at the end of the year new supply, in Upper Silesia constituting 16%, are optimistic, with a further dynamic growth of
510 000 sq m of total warehouse
exceeded 13.6m sq m. The vast majority of and Szczecin with 14%. The BTS (built to suit) the warehouse sector expected. The
Bydgoszcz stock in Poland
new supply is still concentrated in the largest projects have been consistently dominating for increasing developers’ activity is confirmed by
Toruń
areas, such as Warsaw and its surroundings,
Upper and Lower Silesia, Wielkopolska and Wielkopolska
Central Poland. Due to the completion of two CHART 1 1.9m
large-scale schemes, BTS Amazon (161,000 New supply and vacancy rate in Poland sq m Warsaw
sq m) and BTS Zalando (130,000 sq m), the 2007 - 2017 3.8m sq m
region of Szczecin should be distinguished Central
among all emerging markets. As a result, the New supply Vacancy rate Poland 1.8m
sq m
total volume of warehouse space in Szczecin 20% 2 500 000 Lower Silesia Lublin
was doubled within a year and reached
500,000 sq m. The largest concentration area 15%
2 000 000 1.7m
sq m
2.50 - 5.00
remains the Warsaw region, offering
1 500 000 EUR
approximately 28% of warehouse space in asking rents
10% Upper Silesia
Poland. 1 000 000 2.3m Kraków
for warehouse
sq m 420 000 sq m
Rzeszów space
5%
As a result of the good condition of the Polish 500 000
economy, of the road infrastructure
0% 0 sq m
development, and of a high warehouse market 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
absorption, the logistic sector observed the
Source: Knight Frank Source: Knight Frank
10 11
COMMERCIAL MARKET IN POLAND RESEARCH
HOTEL MARKET SELECTED HOTELS OPENED IN 2017
The hotel sector in Poland continues to develop very dynamically. It is reflected in the increasing new
supply on the market, growing demand for hotel services, increasing hotel operational indicators Category Name City Hotel chain Number of hotel rooms
and occupancy rate, as well as in the growing interest in this part of Europe of new international Radisson Blu Resort Świnoujście Rezidor Group 317
hotel brands. What is more, hotel facilities are more often considered by institutional investors as an Unicus Palace Kraków - 60
AC by Marriott Wrocław Marriott International 91
attractive and alternative investment product enabling to diversify portfolio risk.
Courtyard by Marriott Katowice Marriott International 151
Holiday Inn Warsaw City Centre Warszawa Intercontinental Hotels Group 256
CHART 1 Golden Tulip Warszawa Lotnisko Warszawa Louvre Hotels Group 90
Record-breaking hotel rooms
occupancy rate: Number of tourists accommodated in hotels in Poland Indigo Warsaw Nowy Świat Warszawa Intercontinental Hotels Group 60
2010 - January-October 2017
53%
DeSilva Premium Poznań Poznań De Silva 60
Foreign tourists Domestic tourists Tourists in total INX Design Hotel Kraków - 118
Central Gdańsk Gdańsk - 39
the average occupancy rate 25 000 000 —
Ibis Styles Grudziądz Grudziądz Accor 87
in Poland
20 000 000 —
Hampton by Hilton Lublin Lublin Hilton Worldwide 121
Hampton by Hilton Gdańsk Oliwa Gdańsk Hilton Worldwide 101
Over 15 000 000 — Number One Gdańsk - 172
2,500
new hotel rooms delivered in 2017
10 000 000 —
5 000 000 —
0—
Total stock: 2010 2011 2012 2013 2014 2015 2016 Jan-Oct
Over 2017
130,700
Source: Knight Frank based on Central Statistical Office
and growth of average daily rate ADR in the is boosted by the organizing of worldwide
of hotel rooms last year were noted in Warsaw, among all cultural and sport events, by Poland’s
major business hubs. promotion on the international stage, and by
At the end of 2017, there were over 2,730 an extended offer of flight networks. In 2017,
schemes in Poland categorized as hotels, The development of tourism in Poland, Poland was hosting, among others, the World
offering over 130,700 hotel rooms. Within the an attractive offer of hotel services, and their Games and Men’s European Volleyball
last year, the total hotel stock grew up by over improving quality are the key factors Championship. Additionally, Katowice will
2,500 hotel rooms, mainly located in the influencing growth of the demand for hotel organise the United Nations Climate Change
largest Polish cities. Despite the large number services. Since 2010, the total number of hotel Warsaw Marriott Hotel, Marriott International
Conference and UNESCO Creative Cities
of new schemes delivered to the market in guests in Poland grew by 77%, including Network Annual Meeting in 2018, and the
2017, the market structure remained a 59% increase of foreign tourists. The market World Anti-Doping Agency Conference in 2019. 2017 was also a record year for the
CHART 3
unchanged, and 3-star hotels still have the Chopin Airport in Warsaw, which served over
Occupancy rate in Polish hotels by months
largest share of the market, constituting 44% 15.7m passengers, constituting 22% growth 2015, 2016, 2017
CHART 2
of the total stock of hotel rooms. y-o-y.
Average occupancy rate in Polish hotels 2015 2016 2017
2010 - January-October 2017
Record results in the hotel sector reflect the The forecasts for the hotel sector in Poland 65%
highest occupancy rate in the history of the 54% 53,0% remain positive, and the market upturn is going 60%
market, as well as high basic operational to continue in the forthcoming years due to the
52% 50,8% 55%
indicators such as ADR and RevPAR. From growing demand and the interest of
January to October 2017, the cumulative 50% international brands in this part of Europe. 50%
48,3%
occupancy rate of hotel rooms in Poland The most significant openings of new brands
48% 45%
reached 53%. Analysing the monthly average in Poland planned for 2018-2019 are, among
45,3% 40%
occupancy rate, there was a significant 46% others: Moxy, Staybridge Suites, Mote One,
increase within the last two years in every 44% 43,0%
43,6% Crowne Plaza and Residence Inn in Warsaw, 35%
42,7%
subsequent month, while the highest growth Radisson Red and Autograph Collection in
42% 40,9% 30%
was noted in the summer period. Good market Kraków, MGallery by Sofitel in Wrocław and
condition is also confirmed by growing revenue 40% Sure Hotel by Best Western and Curio a 25%
rates noted in almost every large city. Collection by Hilton in Poznań. 20%
38%
According to STR Global, the leading 2010 2011 2012 2013 2014 2015 2016 Jan-Oct I II III IV V VI VII VIII IX X XI XII
company that compiles hotel data, the largest 2017 Source: Knight Frank based on Central Statistical Office
growth of revenue per available room RevPAR Source: Knight Frank based on Central Statistical Office
12 13
COMMERCIAL MARKET IN POLAND RESEARCH
INVESTMENT MARKET
in the regional cities in 2017 were the
CHART 2
acquisition of Maraton in Poznań by Union
Transaction structure in Poland
Investment, the purchase of Przystanek 2017
mBank in Łódź by LCN Capital, the purchase
EUR 4.9
record-breaking volume
bn
of Wratislavia Center in Wrocław by the
Austrian fund FLE GmbH, the acquisition of A4
Business Park III in Katowice by Echo Polska
Office Retail Warehouse Hotels Other
38%
of invested capital in 2017 Properties, and the acquisition of Pilot Tower
in Kraków by First Property Group.
36%
38% The office transactions finalised in Warsaw
primarily consisted of acquisitions of prime
assets located in the core city centre. These
of total transaction volume was acquisitions included the purchase of Proximo 18%
reached by the retail sector I by REICO (Ceska Sporitelna), and the
purchase of Warsaw Spire phase B by CA
EUR 340 m
the highest value of hotel
Immo. The acquisition of the BPH portfolio
purchased by Octava fund was one of the
largest office deals of 2017. The transaction
7%
acquisitions in the market history included 3 retail assets and 8 office properties 1%
Wratislavia Center, FLE GmbH, Wrocław
in Warsaw and Kraków.
The investment market is still on the rise. concluded deals in 2017. Moreover, a high an appropriate rate of return on investment. Source: Knight Frank
Another record-breaking result was noted in volume of acquisitions was observed in the Therefore, the commercial market is At the same time, the good condition of the
2017 when the total volume of transactions hotel sector where the allocated capital developing dynamically, and Poland’s warehouse market resulted in an increasing
reached nearly EUR 4.9bn. That was the reached nearly EUR 340m, what made up 7% investment attractiveness in terms of its investors’ activity in the sector. The volume of in Poland. Moreover, the most significant in the city centre of Warsaw are currently
consequence of a high activity of investors at of the total value of all transactions in 2017. location might be confirmed by the increasing transactions in 2017 reached EUR 920m and transactions in 2017 included the purchase of valued with yields at 5.25%-5.40%, and
the end of the year, when the majority of single interest of new entities on the capital market, was 19% higher when compared with the the Hillwood Ożarów by CBRE GI, the outside the city centre between 7.00% and
assets and portfolio purchases was finalised. Such a high investment volume in 2017 is a such as investors from China or Singapore. previous year. The largest portfolio acquisition acquisition of Panattoni Warszawa Konotopa 7.50%. In the regional markets, the prime
The total value of the allocated capital in result of the good condition of the Polish was the purchase of Logicor assets from by M&G Real Estate, and the purchase of office yields are ranged at 6.25%-7.00%.
Poland grew up by 9% when compared to the economy, a high tenants’ activity in the Nearly 38% of the total volume of signed Blackstone by China Investment Corporation Metsa Krapkowice by Hillwood. Prime retail assets are valued based upon
previous year, and investors were mainly commercial sector, as well as a relatively low contracts was finalised in the retail sector in for nearly EUR 750m. The transaction was part yields at a stable level of 5.25%-5.50%, and
focused on the retail sector which accounted investment risk in Poland, and great 2017 which amounted to over EUR 1.86bn. of the acquisition of 650 warehouse assets The prime yields for the best assets remained industrial prime yields remain at 6.75%-7.00%.
for 38% of the total investment volume of opportunities for portfolio diversification with The investors’ interest in retail assets is not located in 17 countries, including 28 properties at a stable level. The office properties located
weakening, which is reflected in large portfolio
CHART 3
CHART 1 transactions. Certain portfolio transactions
Investment transactions volume in Poland
Prime yields by sector were finalised in 2017, e.g. the purchase of 4 2004 - 2017
2004 - 2017
Ikea retail parks by the Pradera fund which
Office Retail Warehouse was a part of a sale of 25 projects in 8 Office Retail Warehouse Hotels Other
European countries, and the acquisition of
10% 6
Fashion House outlet centres in Piaseczno,
Gdańsk and Sosnowiec by RREEF Spezial
9% Investment GmbH. In 2017, a few purchases 5
of smaller retail assets also took place, among
8% them the acquisition of 4 retail properties from
Blackstone portfolio by Echo Polska 4
Properties, and the acquisition of Marcredo
7%
EUR bn
portfolio by Master Management. The largest 3
transaction of a single retail asset was the
6%
purchase of Magnolia in Wrocław by the
German fund Union Investment. 2
5%
The total volume of concluded deals in 2017 in
1
4% the office sector amounted to EUR 1.77bn,
which accounts for 36% of the invested
capital. An increasing interest in the regional 0
3%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 markets such as Poznań, Tricity or Wrocław 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Knight Frank was also noted. The largest office transactions Source: Knight Frank
14 15
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