by Michał Poręcki | Report

2021 was a year of unprecedented activity of Czech investors and developers on the Polish real estate market. Czech entities are competing with major German, American and Israeli players and so far they are performing very well in the race for the best assets.   


Why Poland?

For decades, Poland and the Czech Republic have been continuously competing for the attention of foreign investment funds. But in the last few years, Czech capital has become very active on the other side of the border of its larger neighbour. According to the data of the National Bank of Poland, since 2013, Czech investment in Poland has risen by a staggering 564%. Poland’s proximity to Western Europe helps, and it also has a highly-qualified labour force as well as a well-developed financial market. The other incentive is the sheer size of the Polish economy and a large number of cities – In Poland there are 14 towns with a population of 200,000 inhabitants or more. In the Czech Republic, there are only three. So it’s no surprise that Czech investment funds and developers are looking for attractive opportunities abroad, as they are coping with a low supply in their home country. Poland – with its size, proximity, attractive yields and a constantly growing base of relatively cheap prime properties – suits their needs very well.  

Residential

One of the most spectacular deals in 2021 in Poland was the acquisition of residential developer Budimex Nieruchomości by local investment manager Cornerstone and Czech developer Crestyl Group, for a staggering PLN 1.5 billion. Budimex Nieruchomości – swiftly rebranded as Spravia - was one of Poland’s leading residential developers. Since the beginning of its operations in 1999, the company has built over 17,500 units in five major cities in Poland.

„The long-term outlook for Poland's housing market is very positive. Despite consistent growth, the number of apartments in Poland per 1,000 inhabitants is still significantly lower than the EU average. It is why we are very excited to enter the Polish market. Its residential sector, still very fragmented, presents us with enormous opportunities”, Omar Koleilat, CEO of Crestyl Group commented on the deal. His company deals with the development of more than fifteen sites all over the Czech Republic with a total investment value exceeding €1.2 billion. The acquisition of Budimex Nieruchomości is its first investment outside its domestic market.

Czech companies also build residential properties by themselves. In January 2021, UDI has started the construction of its first residential development in Warsaw. The Ursus Classic residential development on ul. Dyrekcyjna will comprise seven residential blocks with 960 apartments on a brownfield site of over 3 ha. One of the buildings of the former Ursus tractory factory on which the project is being built is to be converted into an office building with a cafe and a restaurant. The first seven-floor building is to be completed in 18 months and the entire project should be delivered by 2026.

Office

Office properties in Poland are also attracting Czech investors. Ghelamco sold Wołoska 24 office building to a Czech investment fund, ZFP Realitní Fond, managed by ZFP Investments. The value of the transaction amounted to over €60 million. ZFP Investments belongs to the oldest Slovak asset management company IAD Investments. It has been operating in Central European countries for 30 years.

Moreover, by the end of the year, PPF Real Estate Holding, one of the major Czech investment players has acquired New City, a prime business park in Warsaw with 45,000 sqm of leasable space. “The Warsaw real estate market is booming, being one of the most liquid in Central and Eastern Europe. We thoroughly assessed the location, and despite the local market not having avoided the coronavirus pandemic’s adverse economic effects, New City has shown a high degree of stability compared to other office centres,” PPF Real Estate’s Investment Manager, Jiří Sýkora commented on the acquisition.

Czech investors focus not only on the Warsaw market – in March, Investika realitní fond OPF has completed the acquisition of a majority stake in the Szyperska Office Center (SOC) in Poznań from Wechta Nieruchomości for an undisclosed sum. The building on ul. Szyperska on the banks of the river Warta in Poznań’s centre has become the twenty-sixth property owned by the Czech open-ended real estate mutual fund managed by Investika– and the first outside its home country. Szyperska Office Center, built in 2009, comprises 19,000 sqm of leasable space, of which 17,000 sqm is office space. It is fully leased to such companies as Volkswagen, Alior Bank and Mirantis.

Industrial & logistics

The most recognizable Czech investor on the Polish real estate market remains Accolade. Its 25 warehouse and logistics parks scattered across the whole country make Accolade a formidable player and a competitor with the largest local investors. The company continues its expansion in Western Poland, investing recently about €71 million in the expansion of the Goleniów warehouse park and in the construction of a new Jelenia Góra complex.

But other large Czech investors want a piece of this cake too. At the beginning of February, CTP Group, a Czech-based commercial real estate owner, developer and manager has announced a partnership with MDC², a new entity headed by experienced real estate manager Hadley Dean. Construction of the first three locations has already started. CTP has declared that it will invest €200 million during the first year of the project. 

“Poland is not only the largest economy in CEE; its strategic location and proximity to Germany also make it a logistics hotspot,” explained Remon Vos, CEO of CTP when the partnership was announced. “As we start construction in Warsaw and Katowice, we keep exploring other locations in Poland to build hi-tech, sustainable parks for our 700 clients. The demand we are seeing for logistics and industrial property in the Warsaw area and other large Polish cities is immense.”

Last, but not least, ČS nemovitostní fond, managed by REICO, has acquired both phases of Panattoni Park Tychy in Poland. It is a premium logistics property that was completed in the first quarter of last year. ČS nemovitostní fond was established in February 2007 and is the largest and oldest Czech real estate mutual fund. It is designed primarily for conservative investors. The fund now holds eight properties in the Czech Republic, seven in Slovakia and five in Poland.

“The Polish logistics market is going through an unprecedented growth phase. By expanding into this attractive market, the ČS nemovitostní fond also further improves its sectoral and geographical diversification, which is the core of our conservative real estate allocation’, said Tomáš Jandík, CEO of REICO.