Strong rental market performance, favorable macroeconomic indicators, and ongoing monetary policy easing by central banks are driving a continued upward trend in Poland’s commercial real estate investment market. In the first quarter of 2025, the sector attracted over €686 million in capital—marking a 64% increase year-on-year. Market liquidity also improved significantly, with a notable uptick in the number of transactions.
“We expect the positive momentum to continue in the coming quarters, supported by further interest rate cuts from central banks,” said Dorota Lachowska, Head of Research at Knight Frank.
“In April 2025, the European Central Bank reduced rates by 25 basis points for the seventh consecutive time since June 2024. More cuts are anticipated this year, which should stimulate the economy and soften the impact of U.S. trade policy on eurozone growth. The National Bank of Poland also followed suit, cutting rates in early May for the first time in 18 months—boosting access to and reducing the cost of financing.”
Domestic Capital on the Rise
Polish capital is playing an increasingly prominent role in the investment market. In Q1 2025, domestic investors accounted for €116 million, making up a record 17% of total investment volume. Other key capital sources included:
- Israel – 17%
- USA – 13%
- Ukraine – 10%
- United Kingdom – 9%
Logistics and Retail Lead the Way
“In Q1 2025, logistics properties captured the largest share of investment at 29%, totaling over €202 million—a 47% increase year-on-year,” noted Michał Grabara, Director of Capital Markets at Knight Frank.
“The logistics sector remains highly liquid and continues to attract significant interest, especially through sale and leaseback transactions. A standout deal valued at PLN 1 billion in early Q2 was the largest of its kind in Central Europe.”
The retail sector also showed strong performance, with transaction value tripling compared to Q1 2024. Total investment in retail properties reached €189 million, representing 27% of the quarterly volume. Smaller retail assets in secondary cities remain the most liquid, typically valued under €20 million.
Office Sector Shifts Beyond Warsaw
“Unlike last year, most office transactions in Q1 2025 involved assets outside of Warsaw,” explained Krzysztof Cipiur, Managing Director, Head of Capital Markets at Knight Frank.
“These were mostly smaller buildings acquired by local or regional investors, whose activity on the market is growing.”
In Warsaw, only three transactions were recorded, yet they accounted for 59% of the total investment volume in office real estate. Overall, the office sector saw €176 million in investments during Q1—up 65% from the same period in 2024, with a 26% share of total volume.
Living and Hospitality Gaining Ground
The remaining investment volume was spread across the living and hospitality sectors. In Q1 2025:
- The living sector saw approximately €100 million in transactions, comprising 15% of total investment.
- Investor interest in this segment remains strong due to Poland’s significant housing shortage.
- Rental occupancy rates hover around 98%, and rental prices continue to rise steadily.
“The living sector holds strong potential, and the high demand in the rental market confirms its resilience,” added Dorota Lachowska.
Source: CEO.com.pl – Capital Flows Back Into Commercial Real Estate: €686M in Q1 2025
