23:34 9 January 2025
Poland’s Commercial Real Estate Market Soars in 2024
The year 2024 marked a significant rebound in the commercial real estate investment market in Poland, with total investment volume more than doubling compared to the previous year. Estimates indicate that the total value of investments will exceed €4.5 billion, a substantial leap from the slightly over €2 billion recorded in 2023. This remarkable growth was fueled by market corrections that presented opportunities to acquire modern real estate at more attractive prices, as well as reductions in eurozone interest rates. Further rate cuts are anticipated, which could drive even higher investment activity in 2025.
This year witnessed substantial activity across nearly all sectors of the commercial real estate market. Notably, the office market saw the largest European transaction of the year with the sale of the Warsaw UNIT building to Sweden’s Eastnine AB. Other significant deals included the sale of the P180 project by Skanska to INVESTIKA Real Estate Fund and its joint venture partner BUD HOLDINGS, as well as the transfer of the Studio B building by Skanska to Stena Real Estate AB.
Despite these high-profile transactions, the pool of investors in "core" products remained relatively narrow, primarily comprising entities from Scandinavia and the Central and Eastern Europe (CEE) region. However, the number of active investors was still below pre-pandemic levels.
In 2024, the office market presented a unique opportunity for investors to acquire high-quality facilities at relatively attractive prices, thanks to the market correction. Additionally, local capital began to play a more prominent role, targeting buildings with high vacancy rates or those suitable for repurposing into student housing or apartments. These properties often commanded prices below replacement value.
With limited supply of new office developments and cautious attitudes among developers toward new projects, the stage is set for continued investor interest, particularly in Warsaw and major regional cities. The involvement of Polish private capital is expected to grow significantly in 2025.
The warehouse market maintained its liquidity in 2024, with notable transactions such as the sale of the Diamond Business Park portfolio in Warsaw, Stryków, and Gliwice. Intense competition among investors underlined the sector's attractiveness.
In the retail sector, numerous transactions involving retail parks were completed, with participation from both international and local capital. The two largest shopping center deals of the year were NEPI Rockcastle’s acquisitions of the Magnolia Park Shopping Center in Wrocław for €373 million and Silesia City Center in Katowice for €405 million.
The Living sector also saw activity in transactions involving rental apartments and student housing projects, though greater momentum in this area is anticipated. This sector’s growth is tied to expected interest rate cuts in Poland, as most transactions are conducted in PLN. Developers in the residential market, facing a cooling of sales volumes, are increasingly open to discussions about selling entire buildings to investment funds focused on Private Rented Sector (PRS) opportunities.
Meanwhile, the hotel market recorded significant deals, including the sale of the Cloud One Gdańsk property on Wyspa Spichrzów to Invesco Real Estate.
As financing costs decrease due to expected interest rate cuts, the commercial real estate market is poised for even greater capital activity. Investor interest in Poland is growing, driven by favorable market fundamentals and comparatively better returns on investment than in Western Europe.
High activity in the warehouse market is anticipated to continue, alongside a gradual return of capital to the office sector. The Living sector, too, is expected to see heightened activity. With these trends in motion, 2025 could surpass 2024 in terms of investment intensity and market dynamism.
