Polish commercial real estate market fell 61% y/y in Q1

Investment in commercial real estate in Poland amounted to EUR 651 million in Q1 of this year, down 61% y/y, according to CBRE. The company notes that the economic slowdown can be seen in the performance of the entire region. All countries, including Poland, recorded declines, which, in addition to macroeconomic conditions, is also due to more difficult access to financing. Greater activity is not expected before the third quarter of this year.

The value of investments recorded in the commercial real estate market in Q1 2023 year-on-year turned out to be 61% lower. In the first three months of this year, the Polish market saw 26 transactions, including two portfolio transactions, for a total of EUR 651 million. This is a weaker result even compared to the years of the most intense pandemic. Investors placed the largest amount in industrial and warehouse properties. It was €401 million, which accounted for 62% of the total volume attracted by Polish commercial real estate in the first quarter of this year. In second place was the retail sector, with €134 million, or more than a fifth of the total, and in third place was offices, in which €116 million, or 18% of the total, was invested, it was announced.

"The industrial and warehouse sector was the only one in which the value of investments increased year-on-year, and it was a significant increase. Compared to Q1 2022, the volume of capital placed in it more than doubled. This shows how resilient the industry is compared to the rest of the commercial real estate market," added director in CBRE's capital markets department Przemyslaw Lachmaniuk.

The retail market, on the other hand, was dominated by deals involving shopping centers with the potential to increase in value in regional cities and smaller towns, but retail parks and supermarkets continue to attract investor attention. In the office sector, activity has been particularly active in the Warsaw market, especially in "core+" or opportunistic buildings located outside the city center. In the office market, the activity of funds from the Czech Republic, Hungary and Lithuania is noticeable. The rental housing segment did not record investment transactions in the quarter, but still has significant growth potential, the director stressed.

In the first three months of this year, investments in commercial real estate flowed into Poland mainly from European countries, primarily the Czech Republic and Belgium. Total European capital accounted for 57% with 74% from Central and Eastern Europe and 24% from Western European countries. The United States placed 8%, the same amount of capital came from the Middle East, it was also stated.

Source: CBRE and ISBnews