Growing popularity of real estate investment funds
21 June. Warsaw (PAP) - Investments in real estate funds in
Central Europe become increasingly popular. Compared to investments
in shares or money market instruments, investments in real estate
funds are long-term, but at the same time, more stable - said
Patric Berger, analyst from CA IB Financial Advisers during
the conference on Wednesday.
emphasised that popularity of these funds is related to good
situation in the real estate market in Central Europe. In his
opinion, profits of real estate investment funds in the region
analyst participated in the "FLOAT YOUR REAL ESTATE"
conference organised in Warsaw, regarding the situation in the
Polish real estate market and methods of financing this market.
The conference was organised by Roadshow Polska in cooperation
with, inter alia CA IB Financial Advisers, Cushman & Wakefield
and Linklaters. The event was sponsored by Bank Millennium (main
sponsor)and KBC TFI.
to the materials of Cushman & Wakefield (professional partner
of the conference; the company provides services related to
commercial real estate) presented during the conference, Western
investors looking for investment opportunities on markets of
the Central Europe took into account first of all investments
in real estate in Warsaw, Prague and Budapest.
to Cushman & Wakefield, in 2005, the rent for office space
in Warsaw achieved about EUR 17.5 for 1 sq.m. and about EUR
18.5 for 1 sq.m. in Budapest and Prague.
presented during the conference indicated that the value of
investments in the office real estate market accumulated from
1998 in Hungary and Czech is comparable - it equals EUR 1.49
billion and EUR 1.40 billion respectively, while in Poland it
is much higher - about EUR 2.5 billion.
2005, the total value of investments in the office real estate
market in Central Europe amounted to about EUR 1.7 billion,
which means a growth by 51% vs. the previous year, estimated
Cushman & Wakefield.
the same time, taking into account the retail market, the value
of investments accumulated from 1998 equalled EUR 3.5 billion
in Poland, about EUR 1.5 billion in Czech and about EUR 1.1
billion in Hungary. In 2005, the total value of investments
on the retail (housing) market in Central Europe amounted to
about EUR 2.8 billion, which translates to 79% growth vs. 2004.
funds invest in real estate mainly through special purpose vehicles
in form of a limited liability company, joint-stock company
or joint-stock limited partnership - explained Paweł Gieryński,
president of Copernicus Capital TFI. Their tasks include financing
the project, its implementation and then repayment of liabilities
incurred for the implementation of the investment from profits
from the real estate. He added that the form of the special
purpose vehicle ensures minimisation of the investment risk,
is transparent and allows for better management of the real
of conditions imposed on these funds by the law and the Securities
and Exchange Commission is minimising the operating risk by
differentiation of the investment portfolio - said Paweł Gieryński.
As he explained, during 36 months of activities, a maximum share
of one investment in the portfolio of a fund can equal 20% (which
means that the fund has to invest in minimum 5 projects). (PAP)