Purchasing property directly can be time consuming, complicated and involves dishing out quite a large sum in one go, an easier alternative which can also give you the benefits of an improving market is to buy into an investment fund or a public company listed on the London Stock Exchange. Poland has been listed 8th in the the 2010 Real Estate Global Opportunity Index produced by global management consultants A.T. Kearney, so the opportunities are clearly there.
We will review property companies listed at the Warsaw Stock Exchange or the WIG as it’s known, in another post, here we focus on UK based investment funds and public companies that have exposure to the Polish property market and / or investment properties in Poland.
As you can see from the list below, these investments have paid some great returns since the start of the year, though it’s worth taking a closer look at the financials before taking a dip.
- First Property Group Plc,
market cap approx. £19 million, performance year to date -2.6%
- The Eastern European Trust Plc,
market cap approx. £175 million, performance year to date 40%
- Carpathian Plc,
market cap approx £500,000, performance year to date 34%
First Property Group Plc is an AIM-listed property fund management group focusing on asset management with the majority of assets under management located in Poland (mainly shopping centres and office buildings), it also owns properties directly in Warsaw.
The Eastern European Trust Plc is a closed-end investment trust managed by BlackRock Investment Management (UK) Limited, it’s involved in portfolio investment with the objective to achieve long term capital growth by investing in companies that do business in Eastern Europe, Turkey, Russia and other states of the former Soviet Union. Only around 15% of assets are located in Poland and it doesn’t specifically invest in property, but property market prices will impact on results.
Carpathian Plc is another specialist AIM listed property investment company. Carpathian is engaged in the investments and development of retail property in Central and Eastern Europe, with operations in the Isle of Man, Poland, Hungry, Croatia and other places in mainland Europe. With a relatively high total debt to equity (MRQ) at over 400, the company is reported to be in talks to sell a number of properties in Poland in line with its strategy to return money to shareholders.
CS European Frontiers A Inc is an investment fund focusing principally on the Czech Republic, Hungary, Poland, Russia and Turkey. With assets of just under £5 million the fund has achieved impressive results since the start of the year with growth of over 40%. Once again this isn’t a fund which invests in property and Poland only makes up a fraction of the portfolio, but property prices will impact on results.
To focus on a Polish property investment in particular, the Warsaw Stock Exchange will give investors many more options and thats where we shall focus our next report.