Commercial real estate market in Poland according to the NBP report for second quarter 2019

The latest report of the Department of Economic Analysis of the National Bank of Poland provides interesting information on the condition of the commercial real estate market in Poland in the second quarter of 2019.

Office real estate:

According to the NBP report, there is still a high supply of office space. At the end of second quarter 2019, office space stock in the nine largest office markets (Warsaw, Cracow, Wroclaw, Tricity, Katowice, Lodz, Poznan, Szczecin, Lublin) exceeded 10.8 million sq. m and approx. 1. million sq. m was under construction. At the same time, however, the vacancy rate in the nine largest office markets declined slightly to 9 % from 9.2% at the end of first quarter 2019. This is still confirmed by the strong demand for office space.

Retail and service real estate:

The situation on the retail and service space market is slightly different, with a slight oversupply of space and the vacancy rate in the whole country at the end of second quarter 2019 stood at 3.6%. The total stock of modern retail space at the end of second quarter 2019 amounted to over 12 million sq. m. According to the NBP report, the above data may mean that investors consider the market saturated, which can be seen in the increasingly popular projects of transforming existing shopping centres into multifunctional retail, service and entertainment facilities.

Warehouse real estate:

The warehouse space market is still in the development phase. This is mainly due to continued high demand, in particular from logistics and courier companies, e-commerce companies, as well as high demand from industry.

According to the NBP, at the end of second quarter 2019 the total stock of warehouse space exceeded 17 million sq. m and over 2.2 million sq. m of modern warehouse space is under construction. The vacancy rate in the whole country stood at 5.1%.

Value of transactions on the commercial real estate market:

The estimated value of investment transactions in the commercial real estate market at the end of the second quarter of 2019 amounted to EUR 3 billion, of which 59.9% concerned office space, 23.4% retail space and 9.1% warehouse space.

The full text of the communique is available on the website of the National Bank of Poland at the following link: https://www.nbp.pl/publikacje/rynek_nieruchomosci/ceny_mieszkan_06_2019.pdf

The NBP report confirms that Poland is still an attractive place to invest in the commercial real estate market, in particular office and warehouse real estate.