Investments in Poland’s commercial real estate sector exceeded €4.5 billion in 2024, a significant jump from just over €2 billion in 2023, according to Przemysław Łachmaniuk of CBRE. The market correction during the year created opportunities to acquire modern properties at more attractive prices. Interest rate cuts in the eurozone further bolstered market activity, with additional reductions expected to drive further growth in 2025. Łachmaniuk highlighted that substantial transactions occurred across nearly all commercial real estate sectors in 2024. In the office market, notable deals included the sale of the Warsaw UNIT building to Eastnine AB, the P180 project by Skanska to INVESTIKA Real Estate Fund, and the Studio B building by Skanska to Stena Real Estate AB. However, he noted that the pool of investors for “core” assets remained relatively narrow, primarily involving entities from Scandinavia and Central and Eastern Europe, with fewer players compared to pre-pandemic levels. The office market saw a period of correction, enabling investors to acquire high-quality properties at favorable prices. Local capital played a key role in targeting opportunities, particularly buildings with high vacancy rates or those suitable for conversion into alternative uses such as dormitories or apartments. These assets were often acquired below replacement cost, reflecting attractive valuations. The limited supply of new office developments, coupled with cautious developer sentiment toward launching new projects, has created an environment ripe for investment. According to Łachmaniuk, this trend is expected to attract both local and international investors, particularly in Warsaw and major regional cities, with a growing presence of Polish private capital anticipated in 2025. Warehouse and Retail Markets The warehouse sector remained highly active in 2024, with strong competition among investors. A key transaction included the sale of the Diamond Business Park portfolio in Warsaw, Stryków, and Gliwice during Q3 2024. In retail, numerous transactions involved retail parks, attracting international and local capital from the CEE region. Two of the year’s largest shopping center deals involved NEPI Rockcastle acquiring Magnolia Park in Wrocław for €373 million and Silesia City Center in Katowice for €405 million. Residential and Living Sector The Living sector also gained momentum, with transactions in rental apartment projects and dormitory developments. However, greater activity in this sector is expected as interest rates in Poland decline further. Developers are becoming more open to selling entire buildings to institutional investors, particularly in the private rental sector (PRS). The hotel market also witnessed significant activity, including the acquisition of the Cloud One Gdańsk property on Granary Island by Invesco Real Estate. Outlook for 2025 Łachmaniuk predicts that further interest rate reductions will lower financing costs and boost investor activity in the Polish commercial real estate market. Increased inquiries from investment funds signal growing interest, as Poland offers relatively higher returns compared to Western Europe. Warehouse investments are expected to remain a key focus due to strong investor demand. The office market is likely to see a gradual return of capital, while the Living sector is projected to become more dynamic. “With solid market fundamentals and favorable return prospects, 2025 could be even more active for commercial real estate investments than 2024,” Łachmaniuk concluded. Source: CBRE Poland