Transaction renaissance is taking place in the investment land market in Poland

According to Emil Domeracki, Director of the Investment Land Department at Colliers, the first half of 2021 showed that the investment land market does not feel the clear effects of the pandemic.

"We have not seen such an increased number of transactions for over 20 years, as has been taking place since the beginning of this year. In the best years, i.e. in 2017-2019, the annual volume of land trade in Poland did not exceed PLN 5 billion. In 2021, this result was achieved in less than three quarters," Emil Domeracki commented.

What's more, as the expert notes, in 2021, investors are surprisingly active in regional markets. The huge deficit of land prepared for investment areas, incl. in Kraków, Wrocław, and the Tri-City, the markets did not slow down. In the last three quarters, investors took a closer look at regional cities, which so far had not been characterized by too much transaction activity.

"The first half of the year was marked by a huge, cash commitment of investors in the land, which is a novelty. The competition is so intense that no one is surprised by the purchase of land for over PLN 150, 200, or even 300 million. Examples of this type of investment are the last transaction in Poznań – land acquisition by a Kraków developer for over PLN 200 million or land purchase for PLN 300 million in Warsaw, which can be described as a kind of phenomenon," Emil Domeracki added.

He noted that in recent years the profitability of investment projects has been viewed through the prism of up to 10 years, today it is 20-year horizons.

"This shows that the Polish market is a mature market, catching up with Western European markets. It can be expected that at the end of 2021 the volume of transactions in the investment land market will reach PLN 7-8 billion," the expert from Colliers concluded.

(WBJ)