Publications

- March 1, 2019: Vol. 13, Number 3

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The unknown market: Poland has what many retail park investors seek

by Pepijn Morshuis

Retail parks seldom win any beauty contests. Nevertheless, they have long been in high demand among investors and have established themselves as an independent asset class within the retail property sector.

The run on retail parks does have one drawback, however. Prices are rising and achievable yields are decreasing in all key markets. Savills confirmed this recently, using Germany as an example. It revealed that net initial yields for the country’s retail parks fell below those for shopping centres for the first time in 2018. Retail parks still commanded 4 percent, while shopping centres posted a slight increase of 30 basis points to 4.2 percent.

At the same time, the retail property market is considered saturated in many Western European markets. Hardly any new properties are under construction, leading to a shortage in supply. Many property investors are asking themselves where they can still generate attractive yields within the asset class.

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