This is yet another, third major transaction this year, in which one foreign entity purchases many apartments in Warsaw at a time. This time it is about Danish Nordic Real Estate Partners. For EUR 100 million, he purchased over a thousand flats, most of which have not even been started yet.
- The Scandinavians are increasing the prices of flats in Poland with their wholesale purchases
- After the Swedish fund Heimstaden Bostad, the Danish NREP appeared on the market. It has EUR 500 million at its disposal and wants to buy 10,000. apartments for rent
- Investments are carried out mainly in Warsaw
- More such stories can be found on the main page of Onet.pl
Danish fund NREP will spend 100 million euro on the purchase of 1,071 apartments in Warsaw’s Bemowo and Służewiec districtswhich deals in buying and renting flats. This was announced by Tomasz Konarski, president of the development company YIT, the contractor of the investment. The first of these buildings is to be commissioned at the end of 2022. The amount per apartment is around 350,000. PLN.
And that’s not the last word of NREP. It has a total of EUR 500 million to spend in Poland, until the end of this year. Part of this amount will go to the logistics investment portfolio (warehouses). When it comes to housing, it will be until 2025 NREP wants to have as many as 10,000 of them in Poland. In total, NREP has 10 billion euro in the world and has already invested in: Denmark, Finland, Sweden and Norway.
– We treat this transaction as the first step in our framework cooperation and we hope that soon we will be able to build new facilities for NREP in the largest cities in Poland – said Tomasz Konarski.
– The private rental offer in Poland is becoming more attractive. We believe that the demand will increase even more, especially for modern, customer-friendly forms of living in an interesting neighborhood. We are glad that we are making our debut on the Polish market in cooperation with YIT – a long-term partner from Finland, known in Northern European countries for high quality and commitment to sustainable development, with which NREP also identifies itself – says Rune Kock, director of the Living department at NREP.
Scandinavians are increasing housing prices in Poland?
The transaction made by NREP is not the first of its kind this year. We already wrote in May about the transaction signed with Budimex – which, by the way, does not belong to Budimex purchase of 2.5 thousand apartments for rent for PLN 1.4 billion. The buyer was the Swedish fund Heimstaden Bostad.
The same fund previously bought 707 apartments in Warsaw from Marvipol. The average price is 560 thousand. PLNso it concerns larger or better located apartments than in the case of NREP.
In the era of ultra low interest rates, real estate is one form of earning capital where the rent is treated in the same way as interest on the deposit. The funds come to us from Denmark and Sweden, so apparently the Scandinavians have money, but they do not have anywhere to safely allocate it. They see their success in investing in real estate for rent in Poland.
Thus, Scandinavian funds however, they increase the demand on our market, and thus the prices. The latest analysis of Epandera and Rentier.io shows that in Warsaw offer prices increased by an average of almost 7 percent in May. year on year and have already reached 11.5 thousand. per square meter. In Kraków, the increase was as much as 16%, and in Wrocław by 8%, ie prices were rising faster than inflation there. They grew slower than inflation only in Poznań (+ 4% y / y), and in Gdańsk they fell by 1%.
2021-06 Housing prices
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The success of the project of Scandinavian funds depends, inter alia, on whether in Poland no cadastral tax will appearthat would be charged on the second owned apartment. Then it would become less profitable to buy housing for commercial profit from resale after a few years or to rent.
And it is not certain whether we still have such a thing as a housing gap, i.e. unrealized demand. In a pandemic year it was far fewer marriages, far fewer children were born, and more people died. Demographically, the outlook for price increases in the real estate market is worsening, not improving.
In perspective, they are too interest rate increasesthat will reduce the attractiveness of investments for rent. Bank Millennium economists believe that the first rate hike will take place this year.
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