Eika Real Estate Fund (EREF) has acquired the business center “BIG” in central Krakow, Poland, which is mostly leased by State Street Bank, one of the largest financial services companies in the world, providing investment management, investment research and trading services. EREF thus implements its strategy of making acquisitions in asset classes that currently have the greatest earning potential. The fund plans to further expand its investments in Poland into logistics facilities, offices and retail parks.
City center location with prestigious tenant
The .BIG business center, built in 2018 and awarded a BREEAM New Construction “Excellent” rating, covers almost 11,000 square meters. Along with it, EREF will also acquire a land plot, which is owned by ownership and is a rare opportunity in central city locations. The developer of the business center is Ghelamco Poland, one of the largest real estate developers in Eastern and Central Europe.
The location of this business center is very popular among tenants. Currently, only 6.1 percent of the office space in this business center is unleased, for which negotiations with potential tenants are actively underway. The building is located in the western part of the city center of Krakow, from which it is perfectly accessible to the historic Old Town of Krakow, and from it you can also conveniently reach other parts of the city. The business center is surrounded by green surroundings, nearby is Debnickiego Park and the largest leisure and recreation area in Krakow, Zakrzówek, with a lagoon in an old excavated quarry, near the prestigious Vistula boulevards.
The largest tenant in the building is State Street Bank. The company is known for its long-standing experience in the banking sector. The premises leased by State Street Bank typically feature modern offices that meet the highest standards of the most prestigious Fortune 500 companies, and the company is rated as having a very high (AA) credit rating according to the international accreditation system.
State Street Bank often invests in sustainability initiatives to reduce its environmental impact. In this case, their leased modern business center, acquired by EREF, features an atrium, a rooftop terrace, and a beehive on the roof, a joint initiative between the building owner and tenant.
The fact that the building is leased by State Street Bank increases the building’s prestige and credibility among other tenants and visitors – there is no doubt that such a company would not allow itself to be in a building that does not ensure extremely high quality standards.
Continue investments in the high-potential Polish market
Viktorija Orkinė, head of the investment management company Eika Asset Management, which manages EREF, says that the Krakow office market is characterized by stable international tenants who are looking for sustainable and modern offices in this city due to the highly educated professionals living here.
“Poland is currently a market that promises great opportunities for investors. With foreign investments withdrawing from Poland and almost all office liquidity remaining in the city of Warsaw, the office market in regional cities has lost a significant part of its liquidity. For this reason, we can talk to very large international players and buy offices at very attractive, previously unavailable prices,” she explains.
“Our EREF fund plans to continue to adhere to its value creation strategy, using its existing knowledge of real estate management and development and making acquisitions in asset classes that currently have the greatest earning potential. The fund plans to continue investing in logistics facilities, offices and retail parks in Poland,” says V. Orkinė.
According to her, low liquidity and small investment volume allow the Fund to dictate terms and even better represent the interests of EREF investors.
“Currently, in Poland, excellent class assets with stable cash flow can be financed competitively from both local and foreign (German, Austrian) banks. Poland is generally the leader and star of the Central and Eastern European economy, so with the strength of their economy, investments always look solid,” assures the head of EAM.