Polish real estate funds and international experience

The real estate market is an area of direct and indirect investments. In accordance with Polish law, direct investments can be conducted through closed-end funds (FIZ), while indirect investments are conducted through open-end funds. Investment funds have been functioning in the real estate market since 2004, and their history includes both the period of the bull market (2006-2008) as well as the bear market (2009-2014). The first closed-end funds were created in 2004 and were supposed to be closed after eight years i.e. in 2012. However, their results after this period did not enable the closure of funds with the guaranteed return for investors.

The article presents the analysis of the profitability of investments in various funds and the analysis of the basic indicators of those funds in comparison with the experience of investors in selected European markets and the US market Real Estate Investment Trust (REIT). An  attempt is made to compare Polish funds with REIT funds using such indicators as: NAV (net asset value), CAD (cash available for distribution) and AFFO (adjusted funds from operation).

The aim of the study is to evaluate the functioning of the Polish investment funds, which operate on the young,10-year market, in the context of experience of the markets with a long history of funds investing in real estate. The authors carry out the cause and effect analysis of the impact of macroeconomic factors on the fund performance and behavioral factors causing low interest in investing in real estate through the investment funds in the Polish real estate market