Market Insights: A Promising Outlook for Poland’s Commercial Real Estate in 2024

As a dedicated real estate agent with over 10 years of experience and a passion for connecting clients with the best investment opportunities in Poland’s dynamic property market, I am excited to share some insights into the current trends and future prospects of our commercial real estate sector.

A Glimpse into the Market

Despite the challenges posed by high interest rates and geopolitical tensions, there are clear signs of stabilization and a potential recovery on the horizon. Investor interest, particularly in retail assets, is growing, indicating a positive shift in market sentiment.

Market Performance in 2024

Since the beginning of 2024, Poland’s commercial property market has seen a significant increase in investment activity, with transaction volumes exceeding €1.7 billion. This is nearly double the amount recorded in the same period last year. The office sector has been the standout performer, accounting for 46% of the total investment volume, followed by retail at over 29%.

Economic Conditions and Influencing Factors

Poland’s economy is showing resilience despite high interest rates and ongoing geopolitical factors. The National Bank of Poland remains cautious about monetary easing, and interest rate cuts are not expected in 2024. However, the economy is benefiting from strong private consumption, robust wage growth, and significant public sector expenditure. These factors contribute to a positive outlook for the commercial real estate market.

Sector-Specific Insights

• Retail Sector: The retail sector led the way in typical asset trading during the first half of the year, with €449 million in transactions. This strong performance is driven by increasing consumer spending and improved retail sales compared to last year. Notably, the largest retail deal was the acquisition by Czech investment fund Star Capital Finance of a property portfolio comprising 219,000 sqm of retail space for €285 million.
• Office Sector: Investment in office properties reached over €788 million in the first half of 2024, marking a nearly fourfold increase from the previous year. Notable transactions include Eastnine’s acquisition of Nowy Rynek E - Tower from Skanska for over €79 million. However, excluding the acquisition of a 49% stake in CPI by Sona Asset Management, the increase in investment volumes was only 46%.
• Industrial and Logistics: Although traditionally a top-performing sector, industrial and logistics assets saw lower investment activity, totaling over €307 million in the first half of 2024. The largest transaction was EQT Exeter’s acquisition of Panattoni Park Poznań 11 for €90 million. Panattoni was the market leader on the sell side in the first half of 2024.

Yield Trends and Future Outlook

Despite the European Central Bank’s decision to cut interest rates by 0.25 percentage points in June, investor sentiment remains cautious. Prime commercial property yields in Poland are still considered high, attracting more opportunistic capital from Central and Eastern Europe and the Baltic states. The supply of new and fully let assets, particularly in the office and industrial markets, is expected to remain limited due to high borrowing costs and muted development activity.

Looking ahead to 2025, we anticipate a breakthrough year for Poland’s commercial real estate market. The Polish economy is set to benefit significantly from nearly €60 billion in EU funds as part of national recovery and resilience plans. These funds will support various sectors, including green and digital transformations, further boosting the real estate market.

Conclusion

The commercial real estate market in Poland is showing promising signs of recovery and growth.

As we navigate through these evolving market conditions, I am here to help you seize the best opportunities. Whether you’re looking to invest in retail, office, or industrial properties, my expertise and network can guide you to make informed decisions. Feel free to reach out to me for any inquiries or to discuss potential collaborations.