Commercial property investments in Poland see significant growth in 2024
According to BNP Paribas Real Estate Poland’s report, ‘At a Glance. Investment Market in Poland in the Fourth Quarter of 2024,’ commercial property investment in Poland saw substantial growth, particularly in the final quarter of the year. The transaction volume doubled compared to 2023, reaching over EUR 5.05 billion. Despite ongoing geopolitical risks, the outlook for continued growth remains positive.
The office and retail sectors accounted for the highest share of total investment volume, each representing 32% of transactions. The office property market saw 45 transactions worth EUR 1.64 billion, four times more than the previous year. Meanwhile, investment in retail properties reached EUR 1.6 billion, with an average property size of 22,000 square metres, an increase of 7,500 square metres from 2023.
Industrial and logistics properties represented 25% of the commercial real estate market. Investment in this sector reached EUR 1.26 billion, marking a 30% increase compared to the previous year. U.S. investors were particularly active in this category, investing over EUR 350 million, accounting for nearly 28% of the annual transaction volume.
Interest in the residential sector for commercial rental also increased, with transactions totalling EUR 340 million, representing a 170% rise from the previous year. The strong transaction volume was largely driven by four major deals, including the sale of the Cromwell shopping centre portfolio and the transactions for Magnolia Park in Wrocław and Silesia City Center in Katowice. The sale of the Warsaw Unit office building also contributed significantly to the overall investment volume.
According to Mateusz Skubiszewski, Head of Capital Markets at BNP Paribas Real Estate Poland, while the 2024 results were bolstered by these large transactions, it remains uncertain if similar deals will occur in 2025. However, the market has shown signs of recovery, and increased activity is expected in mid-sized transactions valued between EUR 10 million and EUR 50 million.
Market Outlook for 2025
Analysts from BNP Paribas Real Estate Poland suggest that falling interest rates in the eurozone will encourage further investor activity. There has been an increase in capital inflows from the United States, the Czech Republic, and France. Additionally, Poland’s macroeconomic stability and planned spending under the National Reconstruction Plan for 2025–2026 are expected to support further investment.
Despite geopolitical uncertainties and the potential for trade conflicts, investors are showing interest in smaller properties with long weighted average lease terms (WAULT). While German and Asian capital remains largely inactive, domestic investors are becoming more engaged, and the market is anticipating the passage of the REIT Act, which could further stimulate investment.
By the end of 2024, the commercial property market appeared to have reached a balance between buyers and sellers. Capitalisation rates for key asset classes increased by 25 basis points. Based on current and planned transactions, analysts believe that this phase of the economic cycle has peaked and that investment returns in most asset classes are likely to improve in the coming quarters.
Major Transactions in 2024
In the retail property market, the largest transactions included the acquisition of Silesia City Center (88,000 sqm) and Magnolia Park (100,000 sqm) by NEPI Rockcastle for EUR 405 million and EUR 373 million, respectively. Czech Star Capital Finance acquired the Cromwell portfolio, comprising 219,000 sqm of retail space, for EUR 285 million.
The office property sector saw a resurgence in investor interest. The largest single-asset transaction was the purchase of the Warsaw Unit building by Eastnine AB from Ghelamco for approximately EUR 280 million. Other notable transactions included the acquisition of the P180 office building in Warsaw for EUR 100 million by Investika Real Estate Fund & BUD Holdings and the sale of 49% of the CPI portfolio by Sona Asset Management, covering 315,000 sqm of office space.
In the industrial and logistics sector, the most significant transaction was the purchase of the 7R portfolio for EUR 143 million by the Czech fund Investika. White Star acquired the Diamond Business Parks portfolio in Gliwice, Ursus, and Stryków for EUR 132 million. The most active seller in the sector was Panattoni, accounting for 40% of the total transaction volume, followed by 7R with a 19% market share.
The overall commercial property market in Poland showed strong growth in 2024, with investors demonstrating increased confidence. While uncertainties remain, the positive market outlook, falling interest rates, and stable economic conditions suggest further expansion in the coming year.
Source: BNP Paribas Real Estate Poland
