Viewed over 15 years, Poland's economy
and prospects fully justify inclusion as an Internos country of
focus. GDP growth 1996-2007 was about 4.6%. Of EU countries, only
Poland grew through global downturn. The outlook suggests a
strengthening currency and euro adoption. Internos is one of few
fund managers with in-depth experience of Polish real estate with
supply expected to lag demand.
Economic characteristics
An EU member since 2004, with 38m population, in 2009 and 2010,
Poland's economy grew by 1.7% and 3.8% respectively (Economist
Intelligence Unit, Mar 2011) achieved by an educated workforce paid
on average much less than Western Europe. 'Nearshoring' - providing
capacity to nearby countries is the economy's mainstay: 34% of GDP
is exported, of which 26% to Germany (2010, EIU). Wages are well
below those of client states and domestic demand steadily improves.
Politics of today's government and likely successors are largely
centrist and favourable to business.
Outlook
By end 2011, EIU predicts 4.2% GDP growth, a strengthening zloty
(v euro and USD) and possibility of early euro adoption. In real
estate, stronger business and consumer demand creates an
environment where construction may not be able to keep up: lack of
finance has been a problem spilling into Poland from neighbours -
thus an excellent environment for real estate investors.
Focus
Strong corporate and domestic sectors lead us to seek office and
retail opportunities in major cities: Warsaw, Wroclaw, Krakow.
Privatisation of state assets will continue as a source of major
projects.
Internos in Poland
Internos co-founder, Andrew Thornton, pioneered in
Poland for Parkes and Company in the 90's - and as the firm became
Invesco Real Estate Europe, maintained Polish investment with
Thornton as COO. Justyna Pyra, Internos Portfolio Manager, is a
Polish national with experience of the Polish real estate market
working in acquisitions for London-based private equity funds.