Eika Real Estate Fund (EREF) has acquired the BIG office in Poland, in the central part of Krakow, which is let to State Street Bank, one of the largest financial services companies in the world, providing investment management, investment research and trading services. This is in line with EREF’s strategy of making acquisitions in asset classes that currently offer the highest risk-adjusted returns. The fund plans to further expand its investments in logistics, offices and retail parks in Poland.
City centre location with a prestigious tenant
Built in 2018, the BIG office, which has been awarded a BREEAM New Construction Excellent rating, occupies almost 11,000 square metres. EREF will also acquire a plot of land owned on a freehold basis, which is a rare opportunity for the city centre. The developer of the office is Ghelamco Poland, one of the largest property developers in Eastern and Central Europe.
The office is in a location attractive to tenants. Currently, only 6.1% of the space is vacant, the negotiations for which are underway with potential tenants. The building is located in the western part of the city centre of Krakow, with easy access to the historic Old Town, and other parts of the city. The property is surrounded by Dębnicki Park and Zakrzówek, Krakow’s largest leisure and recreational area with a lagoon in an old quarry, close to the prestigious Vistula boulevards.
The building’s largest tenant is State Street Bank, a company that is renowned for its many years of experience in the banking sector. State Street Bank’s leased space is equipped with modern offices that meet the highest standards typical for the most Fortune 500 companies. The tenant benefits from a high investment-grade credit rating (AA).
State Street Bank invests in sustainability initiatives to reduce its environmental impact. In this case, the modern office it leases has a roof terrace and beehives installed on the roof at the initiative of the building owner and tenant.
Will continue to invest in the Polish market which has high potential
Viktorija Orkinė, Head of Eika Asset Management, the investment management company that manages EREF, says that Krakow’s office market is characterised by stable international tenants looking for sustainable and modern office space in the city, thanks to its highly educated.
‘For investors, Poland currently offers great investment opportunities. With foreign investors retreating from Poland, the majority of its office market liquidity has concentrated in Warsaw, leaving the regional city office market liquidity scarcer. As a result, we are in a position to negotiate with large international players and acquire offices at attractive prices that were not available before,’ she says.
‘EREF’s value-add strategy capitalises on the team’s expertise in real estate management, development and the ability to distinguish acquisitions in sectors that currently offer the highest risk-adjusted returns. The fund will continue investing in logistics, offices and retail parks in Poland.’
According to Viktorija, the reduced market liquidity and investment volumes allow the fund to negotiate better terms for the EREF investors.
‘At the moment, high quality assets with stable cash flows in Poland can obtain competitive financing from both local and foreign (German, Austrian) banks. Poland is the star of the Central and Eastern Europe and the strength of its economy offers great investment opportunities.