First IPD Polish property index reveals negative capital growth

IPD published its first ever commercial real estate index for Poland today, backed by 4 years of historical data. According to the inaugural IPD Poland Annual Property Index, capital growth was -2.4% last year, compared to 7.2% in 2007. Income return held stable at 6.1%, contributing to an overall total return of 3.5% for the 12 months to the end of December 2008, compared to 14.6% the previous year.

Poland produced the shallowest capital value decline among the constituent countries which make up the IPD CEE Annual Property Index, which was also released today. The Central and Eastern European region delivered capital growth of -5.4%, while income return was 6.3%, contributing to an all property total return of 0.5%.

Offices led at the sector level on a total return basis, with 6.1%, followed by the Retail and Industrial sectors which returned 2.1% and 0.1% respectively.

Reversionary yields climbed 30 basis points over the 12 month period, ending 2008 at 6.9%. Rental value growth fell 10 basis points year-on-year at 4.5% in 2008.

Nassos Manginas, IPD’s Director for Central & Eastern Europe, said: “IPD is very happy to produce the first Polish real estate index, the first of its kind in Central and Eastern Europe. This will undoubtedly help to increase transparency in the region further. The Polish index, valued at EUR 4.2bn at the end of 2008, is the largest constituent of the CEE countries, accounting for 40% of the total by market
capitalisation.”

source : IPD