According to new report of Jones Lang LaSalle and Reas Konsluting, city of Sofia (Bulgaria), Bratislava (Slovakia) and Warsaw (Poland) are the hottest residential markets. Sofia being a top pick regarding future prospects. Polish cities attracts foreign speculative demand, which account for 30% of new flats sold in Cracow and 20% in Warsaw and Gdansk. Price growth is expected to slow down in Warsaw and the Baltic States, while they are expected to continue growing in Bratislava, Prague and Budapest. Average price for appartment in Warsaw stands at EUR 1,750/sqm, only Ukrainian city of Kiev being more expensive with EUR 2,000/sqm.
Our view: We see that the survey only confirms the trend and what GTC and Orco has been telling us for some time. GTC increased substantially its exposure to residential market over the year 2006 with 32% of total space in its portfolio, while Orco being active for some time. We remain positive on undamentals in real estate which should benefit GTC as well as Orco going forward.