Despite the difficult situation on the European market due to many unexpected events, Germany is still one of the largest foreign investors in Poland. In recent decades, German companies have made significant investments in various sectors of the Polish economy, including the commercial property market. Will the turnaround in the German property market, which began in 2022, change this trend? Can the Polish commercial property market be a safe haven for German investors and an opportunity for a bright future?
Despite a multi-year slowdown in capital flows and deteriorating liquidity on global markets, Central and Eastern Europe, including Poland, remains attractive for investors, including in the commercial property sector. The impact of German investments on the Polish commercial property market has been and continues to be significant, as they influence the market dynamics and contribute to its development. And as the German commercial property sector faces challenges such as the crisis in the residential sector, investments in stable markets such as Poland offer opportunities for effective market diversification.
Why is it still worth investing in Poland?
Geographical proximity and membership of the European Union have been important reasons for German investment in the Polish property market for years. As a neighbouring country to Germany, Poland offers logistical advantages and access to a pool of skilled yet cheaper labour. This makes it an attractive location for German investors looking to expand their property portfolio. In addition, despite its continuous growth, the Polish market still offers attractive prices, and the prospect of their further increase suggests high returns.
The global standard for assessing investment risk is the quality of a country’s economy and political environment. In the case of Poland, political stability and well-established economic development are a given. In addition, Poland has a high level of resilience to economic crises and offers increasingly favourable conditions for business development. Investors from different regions of the world perceive our country as a safe and profitable investment location. Our commercial property market has held its own in difficult times such as the pandemic and the economic standstill, which has further strengthened investor confidence in the sector. Today, the property market is being stimulated by increasingly low inflation, making it an attractive sector for investors looking to diversify their portfolio.
Strategic location and technology
The attractiveness of the Polish commercial property market for investors is also determined by the country’s strategic location in Europe. This takes the form of an influx of numerous immigrants, new companies and military investments, which always promotes dynamism, including on the property market.
The Polish economy is also increasingly innovative compared to other European countries. The development of new technologies and modern infrastructure on the Polish property market offers German investors access to innovative solutions and opportunities that may not be so readily available in other countries.
Summary
Investor confidence in the Polish property market is shaped by many factors – market stability, transparency, and professionalism, as well as the role of the capital market and inflation. As a member of the European Union, Poland has a legal system that is understandable for investors from other EU countries, which facilitates the investment process. Among others the geographical proximity between Germany and Poland was and is of considerable importance, which also influences the attractiveness of the Polish commercial property market for German investors.
Szymon Mojzesowicz, CEO Lege Advisors
