‘More Asian capital is targeting Poland and CEE’

Adrian Karczewicz, Head of Divestment CEE, Skanska

Asian investors are targeting Poland and other CEE countries, attracted by higher yields and the currency play, Adrian Karczewicz, Head of Divestment CEE, Skanska, told Real Asset Insight.

‘Some time ago Skanska qualified as the biggest office development company in Europe,’ he said. ‘We are very happy with our current German client base, but we have so many projects and even more in the pipeline. We are expanding, looking for new sources of capital and  trying to diversify the pool of investors’. 

A particularly active interest has been shown by investors from South Korea, Singapore and the Philippines, while the Japanese are looking around but not taking the plunge yet.

‘South Koreans are very keen, they like the liquidity and long leases and the large volumes of property on the market, but above all they like the currency play between the Won and the euro, and of course all properties in Central Europe are leased and sold in euros,’ Karczewicz said.

Korean investors started investing in logistics in CEE but have now entered the office market in Poland and Czech Republic and are consolidating and expanding their presence. In the past they invested a lot in London but now that is not so attractive, partly because of Brexit and partly because there is less of a currency advantage.

‘They like Paris and the German cities but it is too competitive, so they are looking at higher-yielding assets and in Warsaw and Prague you can have 4.5-5% which will look attractive to investors back home’, he said. 

Skanska has also managed to attract capital from the Philippines. ‘Six months ago they bought two office buildings in Katowice for €16 mln and they are have just acquired another project in Gdansk, so they are not just staying in the country but actually expanding and looking at other cities which is a very interesting development,’ Karczewicz said.

Investors from Singapore are also interested in Poland but they tend to focus on Warsaw where there are a few office towers coming to the market and transactions are of the right size for them because ‘they will not go below €100 mln’, he said. 

The gateway cities like Budapest or Prague offer opportunities, but there is only one country in the region that has many strong regional towns as well as a strong capital, he said: ‘Poland has the unique advantage that you can buy in Warsaw and then diversify into other cities’. 

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