Cautious experts – How the Ukrainian situation will affect the real estate market in Poland

Real estate valuers are cautious about their judgements, but so far they agree that the conflict in Ukraine is having little effect on the valuations of commercial properties in Poland.

Valuers are faced with a dilemma when it comes to factoring into their estimates such unquantifiables as the investor mood. “That was the situation in March 2020 at the beginning of the pandemic when the market virtually died. Such circumstances are particularly uncomfortable for valuers, who need to base the assessments behind their valuations on evidence from the market.” – Marcin Malmon, associate director of deal advisory, real estate advisory and valuation team at KPMG in Poland tells Eurobuild CEE.

While at the onset of the pandemic valuers lowered their valuations, in the end, they recognised that investment risks had grown at that time.

Market uncertainty clauses are here again

The pandemic made it clear that valuation uncertainty exists. To signal how the market had changed, most valuation firms in Poland started adding clauses about the market uncertainty to their reports.

Such clauses are appearing once again as a direct result of the war in Ukraine. “A thorough valuation requires all the relevant market information to be factored in and for objectivity to be maintained. When there is so much economic uncertainty, as people in the property market follow geopolitical events closely and put off their business decisions, the shelf-life of such valuations is shortened. You need to read documents with that day’s date printed on the page of the valuation. The reason is, that we are using information from before the conflict and so we have to state clearly that we are working in a market with a lot of uncertainty,”- explains Marek Jamro, the director of the valuation department at JLL in Poland.

Should we expect a rise in yields and a fall in property prices?

“Nobody knows this for sure, because, apart from the greater feeling that there is more uncertainty because of the war in Ukraine, there have not been many signs of an imminent rise in yields,”- Malmon answers the question raised by Eurobuild.

Malmon expects that rises are only going to be symbolic. If more substantial information isn’t forthcoming from the market, then valuers are only going to raise the yields in their valuations slightly.

The current crisis isn’t expected to affect rents, as opposed to the pandemic when lockdowns hurt many territories from retail and office space to hotels.

Arkadiusz Bielecki valuation director of Newmark Polska believes that the migration due to the war in Ukraine could boost apartment sales as well as the hotel business and the entire living sector. “This stems from the necessity to house Ukrainian citizens regardless of where the financing to meet this need is going to come from.” He explains that retail properties could also benefit, due to the requirement of meeting the daily needs of a rising number of people.


Experts agree that transactions initiated before the outbreak of the conflict in Ukraine are being continued – and there are no signs of any mooted trend of investors backing out of deals. Marek Jamro of JLL says: “Apart from there being more caution when it comes to investment decisions, we haven’t seen any reduction in interest on the demand side. There is also no pressure to sell off assets quickly. Today the market still looks stable.”

To see how the events unfolding in Ukraine will drive the market we are just going to have to wait. Professionals conclude that at the moment too little time has passed to give a final judgement on the situation. They will have more to say after the second quarter of this year when it will become clear what impact the situation has been having on leasing levels.


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