Investments in commercial real estate in Poland are expected to accelerate in 2024 and could increase by 10% year on year, according to the “Market Outlook 2024” report by CBRE. This trend is expected to be particularly visible in the second half of the year in the industrial, logistics, and residential sectors. In the office market in Poland’s largest cities, tenants will maintain high level of activity, while the growth of the retail market will be stimulated by lower inflation and increasing consumer purchasing power. Geopolitical situation and high core inflation remain risk factors.
“The forecasts for the economy and the commercial real estate market allow for an optimistic look into the future. Negative trends, such as lower GDP growth, high inflation and interest rates, are beginning to reverse. The delayed impact of higher interest rates allows for faster economic growth, which we should start to feel particularly in the second half of 2024. Poland will also benefit from the growth of global activity. According to our survey of investors, Poland ranked third in the top ten countries with the highest expected return on real estate investment in 2024. Moreover, Warsaw, as the only capital of Central and Eastern European countries, ranked among the top ten most attractive European investment destinations,” said Katarzyna Gajewska, director of market research and analysis at CBRE.
According to CBRE’s forecasts, the volume of investments across Europe, including Poland, may increase even by 10% in annual terms in 2024. The most desired sectors will be industry and logistics, which over one-third of respondents indicated in CBRE’s “Investor Intentions Survey 2024”, and the housing market (28% of indications).
Despite solid foundations, the industrial and logistics market turned out to be one of the most stable markets, despite the slowdown in 2023. Tenant activity in Poland during this period exceeded expectations – 5.7 million square meters of space were rented. This is the third-highest value in the history of the market, despite a 15% decrease compared to 2022.
The institutional rental property sector in Poland is just developing. Despite a high interest from investors, this type of premises represents less than 1% of the housing stock in the 6 largest cities in the country. The market is struggling with low supply. Further growth of the sector will be shaped by legal changes related to spatial planning, technical conditions for new buildings, energy performance certificates, and the enactment of the so-called new developer law. The potential for the growth of the institutional rental market is substantial – almost one quarter of the investors from the CEE region is considering investing in this sector.
In the office market in Poland, the dominant trends are optimizing the office space and improving its quality. These result from the need for better cost control and making offices more attractive to encourage people to work in the office and to attract talent. As a result, tenant activity is increasing. In 2023, demand in Warsaw reached 749,000 square meters, or 15-20% more than during the pandemic years (2020-2021), and in regional cities, it was record-breaking. It reached 740,000 square meters, which is 9% more than the previous record.
Lower inflation and growing purchasing power in 2024 should stimulate retail sales. The broad integration of the offline shopping world with the online channel will continue to develop. E-commerce’s share in the Polish retail market is at a relatively high level, more than two years ahead considering the growth trend before the pandemic. In the offline shopping, retail parks will continue to dominate. New foreign brands, increasingly keen on opening their stores in our country, will also appear.
