Early Signs of a Rebound in Real Estate

Over 700 construction companies failed this year, either from lack of contracts, cost of building materials, or perhaps because of mismanagement. According to Eurostat, the construction industry’s value is expected to contract by 5.7% for the year, but perhaps rebound in 2025. 

The number of residential buildings has dropped by 9.9% year-over-year, driven largely by rising costs due to high inflation.

The commercial sector, by contrast, saw second-quarter investment volumes exceed €1.3 billion—the highest quarterly figure in over a year and an 80% increase compared to the same period in 2023, according to Knight Frank. Most of this capital has been directed toward developers. 

Several significant projects are underway across Poland, including Vastint’s Waterfront project in Gdynia, the Wrocław Oncology Hospital in Wrocław, the Kotla Photovoltaic Farm in Kotla, and the Wita Stwosza Street Student Accommodation in Kraków.

Prepping for big investments

The Central Transportation Hub (CPK) project stands out as a significant investment, aiming to serve 34 million passengers annually by 2032. This development is expected to stimulate the real estate market, particularly in the surrounding areas. Additionally, industrial and logistics hubs like the Poznań Warehouse Complex are being developed. Clearly, things are getting built. 

Industrial and logistics, trucking along

According to Cushman & Wakefield, the Industrial and Logistics segment experienced a significant uptick in occupier activity, achieving the highest leasing volume in Europe during Q2 2024. By Q3 ‘24, Poland’s total warehouse stock had reached 33.3 million square meters, with an additional 1.9 million square meters under construction, according to CBRE.

Back to Office

BNP Paribas noted that the office market remained strong, especially in Warsaw, where the vacancy rate decreased to 10.7% by Q3 2024. The rise in pre-let agreements suggests growing occupier interest in office buildings under construction. Colliers notes that Warsaw’s office market expanded by 75,000 square meters, quadrupling the amount from last year. In Q3, three office projects totaling 11,200 square meters were completed. Hope you’re ready to go back to the office.

Betting on Safety

Rising labor and material costs are pushing developers to focus on profitable segments such as office spaces, mixed-use projects, and warehousing, while steering clear of speculative developments. High-value, long-term projects that incorporate cost-saving strategies, modular construction, or energy-efficient designs have become more viable alternatives to the unrestricted expansion seen during periods of low inflation.