FM newsroom – Poland, investment market, office. In the first half of 2024, the investment market in Poland experienced a noticeable increase in investor activity. The transaction value exceeded EUR 1.65 billion, representing an 86.5% increase compared to the same period in 2023.
With over 50 agreements concluded, the Polish market approached 85% of the total investment volume achieved throughout the previous year. According to a report by Savills, market players showed a strong interest in the office sector, with regional city buildings also attracting their attention.
Most transactions took place in the second quarter, accounting for as much as 80% of the total transaction value. Throughout the first half of the year, domestic investors completed 12% of all purchases, spending over EUR 206 million on various types of properties. Investors from other Central and Eastern European countries were responsible for 21% of the transaction volume value. In the first half of the year, Warsaw saw funds making purchases worth nearly 50% of the total transaction value. Although investors were selective, focusing on assets with high growth potential, the number of active buyers in the market increased, Savills informs.
„The current transaction volume does not fully reflect the investment sentiment, which is likely to improve over the next year. This is especially expected as pan-European funds become more active and begin transactions in Western European markets. However, the gap between sellers’ and buyers’ expectations remains significant, which will impact the number of transactions, particularly in the prime asset segment. – Mark Richardson, Head of Investment, Savills Poland”
301% increase in the office market
The office sector dominated the investment market in Poland, with transaction values exceeding EUR 800 million, marking a 301% increase compared to the first half of the previous year. In total, 22 sales agreements were signed between January and the end of June, including six transactions involving office buildings in regional cities. Unlike in 2023, investors have now completed transactions involving premium properties. However, the report’s authors note that office buildings with potential for value growth (value-add offices) were still significantly more popular.
Retail boasts considerable interest
In the retail property sector, transactions totalled EUR 497 million, reflecting a 149% increase compared to the previous year. A significant impact on these results was the sale of a portfolio of six shopping centres to Star Capital Finance, with a total transaction value of EUR 285 million. In the first half of the year, investors continued to show considerable interest in retail parks and smaller properties.
33% decrease for the industrial sector
Despite increased investor activity, the sector saw a decline in transaction value to EUR 294 million, a 33% decrease compared to the first half of 2023. The number of active investors is growing, but they are primarily focusing on modern properties with solutions that help achieve ESG goals and are located in major logistics hubs.
Institutional leasing (PBSA and PRS) is on the rise
The report’s authors note a significant increase in investor interest in private student housing. The highlight of the half-year was the launch of a private student accommodation platform involving Signal Capital Partners, Griffin Capital Partners, and Echo Investment. Over the next 3-5 years, this trio plans to invest in developing a portfolio of up to 5,000 beds in private, modern, and energy-efficient student residences in major academic cities in Poland. The institutional residential rental sector (Build to Rent – BtR) also attracts attention, though transactional activity has been limited. In the first half of 2024, operators managed a pool of 1,400 such apartments.
„We expect investment activity in the Polish market to increase over the next 6-12 months. A potential interest rate cut by the European Central Bank is anticipated to improve investor sentiment and boost market activity. Poland remains an attractive market for capital from Central and Eastern European countries, including the Czech Republic and the Baltic states. Investors’ perception of the Polish market has not changed; they continue to view Poland as a mature, developed, and stable market where investing remains profitable.” – Mark Richardson, Head of Investment, Savills Poland
Read full report here.
