The total value of transactions closed in the development land market in Poland in 2017 amounts to more than PLN 5 billion, which is the highest figure since 2008, according to a recent report by Colliers International. The company itself last year brokered 20 deals valued at a combined PLN 750 million. The most demand has in recent months been seen in the residential sector, which is now defined by a dwindling supply of sites and a steep increase in the price of plots in prime locations.
“Residential developers accounted for more than 70 percent of all the transactions closed in the first three quarters of 2017,” revealed Emil Domeracki, an associate director, investment services/land, at Colliers International. He added that some of the best sites which allow the buyer to launch construction work on a new residential investment relatively soon are now often even 20 percent or 30 percent more expensive than in 2016. The highest prices exceed PLN 3,000 and even reach PLN 3,500 per one sqm of usable residential space.
The shortage of plots has also been a problem in the office sector, if even the average prices of land have remained at a stable level. Developers are now increasingly turning to locations that were previously associated with class-B buildings, as well as are buying centrally located existing office buildings with remodelling potential. On the other hand, plots for boutique office schemes are also attracting more and more investor attention. In the retail sector, developers have mostly been looking for sites for retail park projects in smaller cities.