Real estate

Commercial real estate investment is recovering in Poland

 

Commercial real estate in Poland in 2021

 

In 2021, investment in commercial real estate in Poland increased slightly, but was still smaller than before the pandemic. Instead, a record number of transactions were concluded. Interest in logistics facilities continued to grow, while interest in office buildings declined.

According to the consulting firm CBRE, in 2021 investors from Poland and abroad bought existing and under construction commercial real estate in Poland for 5.71 billion euros. This is 7% more than the year before, but quite a lot (25%) below the pre-pandemic level. However, a record number of deals were concluded (164, that is 11 more than in 2019, the best so far).

 

Warehouses are the most popular commercial real estate investments

 

Investments in commercial real estate in Poland clearly accelerated in the second half of last year. From January to June, 62 contracts were signed, amounting to 2 billion euro. The second half of the year, and especially the last quarter (contracts for 2.18 billion euro), brought a definite acceleration.

Most capital (51 percent of the total) in Polish commercial properties market was spent by purchasers on logistics facilities. Transactions concluded in this segment of the market totalled 2.94 billion euro (all-time record).

It was the second year in a row in which warehouses and industrial halls enjoyed the greatest interest of the funds. This is related to the dynamic development of the Polish e-commerce sector.

The increase in outlays on industrial and logistics facilities is accompanied by a decrease in the capitalization rate of these buildings. In 2021, it amounted to 4.35 percent, which was the lowest among all types of commercial real estate and clearly lower than before the COVID-19 era (5.75 percent).

 

Offices are losing, retail parks and apartments are gaining

 

The second place in terms of size of amounts invested last year in Poland was taken by office buildings. Buyers engaged in this segment 1.7 billion euro (30 percent of the total). This is less than in pre-pandemic times. The reason lies in the growing popularity of remote and hybrid working.

Every sixth euro spent on commercial real estate investment in 2021 was on retail facilities. A total of 0.9 billion euro was allocated to them.

COVID-19 also caused some reshuffling in this market segment. Retail parks are gaining in importance, while traditional shopping malls are losing ground. The former provide relatively greater sanitary safety. They are constructed in such a way that stores can be entered directly from the parking lot.

Investors allocated 621 million euro for transactions in apartments for rent. However, only 35 million euro was included in the total volume. The rest of the funds were related to projects which are in the pipeline and have not yet physically started (forward-purchase).

According to authors of the report „Poland Real Estate Market Outlook 2022” residential segment will play more and more important role in the Polish commercial real estate market.

 

Commercial real estate on target for European funds

 

In 2021, the largest source of capital placed in commercial real estate provided entities from Europe. They allocated 2.6 billion euro, or 47 percent of the volume, to investments in Poland. Funds from North America put up 1.3 billion euro (23 percent of the volume). Investors from Asia concluded transactions amounting to 0.64 billion euro (11 percent).

Buyers from Poland invested 235.5 million euro on the domestic market, which constituted 4 percent of the whole pool. This is one of the lowest rates on the Old Continent.

 

Buying a property in Poland guide

 

Buying a property in Poland guide may be found in Investor Zone section of our webpage. Real Estate Attorneys of our Law Firm represent and advise in commercial properties transactions as well as in private property purchases.

Author team leader DKP Legal Michał Dudkowiak
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