Investments in commercial real estate to increase in 2021: EY

The volume of transactions on the commercial real estate market will increase y/y in 2021 compared to €5.6 billion last year (which meant a decrease by 28 percent y/y), according to the publication of EY Polska ‘The Polish Real Estate Guide 2021. The real state of real estate.’

"We expect an improvement in sentiment on the commercial real estate investment market this year. Poland, the largest country in Central and Eastern Europe, remains attractive to investors thanks to the good economic situation, stable tenant demand, and rates of return still higher by 1-1.5 percentage points than in Western European countries. Undoubtedly, the favorites will continue to be warehouses and logistics, followed by offices – although in this case, it will be very important to maintain the demand for new office space and the type of space leased (flex vs. traditional offices),” Anna Kicińska, EY Partner, Real Estate Group Leader, said.

The Polish commercial real estate market performed relatively stable last year compared to the more developed markets in Western Europe, North America, and Asia. Portfolio transactions, especially in the warehouse sector driven by e-commerce, made a significant contribution to the total volume of the investment market in 2020. Polish logistics was also helped by its central location on the map of Europe and the relatively stable macroeconomic situation. In the entire 2020, the value of transactions in the warehouse area amounted to €2.8 billion (compared to €1.56 billion in 2019), which gave the sector a 50 percent market share. Thus, warehouses dethroned the office market, the former leader, whose share in the transaction volume shrank to 39 percent. The value of transactions in the office market decreased to €2 billion from €4.05 billion in 2019. However, 2/3 of transactions in the office sector were concluded in Warsaw, which remains the most expensive city in Poland.

Lockdowns hit the commercial sector on several occasions. The value of the transaction decreased to €650 million in 2020 from €2 billion in 2019. Transactions in the convenience segment prevailed. These trends should also continue in 2021.

(ISBnews)