Growth in regional Polish offices attracts German banks

Helaba and pbb Deutsche Pfandbriefbank have backed a portfolio owned by Globalworth.

The latest financing in the Polish market by German banks Helaba and pbb Deutsche Pfandbriefbank highlights lenders’ interest in the country’s regional office market.

The two banks have written a €100 million investment facility to finance four properties for seven years, provided to Globalworth Poland Real Estate, a real estate platform majority owned by Globalworth, the London-listed property company active in Central and Eastern Europe.

Helaba and pbb provided equal portions of the debt facility, which will finance West Gate and West Link, located in Wrocław; Tryton Business House, in Gdańsk; and CB Lubicz, in Kraków.

Regional Polish office rents and yields are under pressure – upwards and downwarsd, respectively.

In Wrocław, rents went up by 3.6 percent by the end of Q1 2018, compared to the previous year, according to Cushman & Wakefield data. The trend is not uniform across the country, however; rents in Gdańsk and Kraków remained unchanged year-on-year.

Yields compressed in Kraków and Wrocław, both down by 25 basis points to 6 percent and 6.25 percent respectively. In Gdańsk, yields were stable at 7 percent by the end of March, year-on-year.

“Helaba has always been active in the regional markets – first financing retail projects; now we also finance good quality office assets in the leading regional markets,” Martin Erbe, head of international real estate financing in continental Europe, told Real Estate Capital.

“This is supported by the strong numbers for such markets,” Erbe explained. “In regional markets, the office take-up in 2017 was 16 percent higher than the previous year and 60 percent of the office investments in Poland in 2017 were in regional cities.”

Dieter Knittel, from pbb’s CEE origination team, added: “The width and depth of the Polish real estate market allows for a wider focus than Warsaw in this important market for pbb.”