The international advisory firm Cushman & Wakefield has summarized investor activity in the Polish office real estate market for Q1 2025. During this period, office sector transactions totaled €164 million. While the beginning of the year was relatively quiet in terms of finalized deals, Cushman & Wakefield experts predict a significant pickup in activity and investment volumes in the following quarters.
The Market Takes a Breather Ahead of Busier Months
In Q1, office asset transactions worth €164 million were completed, representing 24% of total commercial real estate investment volume. A total of eleven sale agreements were signed during this period, although most were smaller transactions under €10 million, explains Marcin Kocerba, Partner, Capital Markets at Cushman & Wakefield Poland.
The largest transaction recorded during this time was the acquisition of the Wronia 31 building (16,600 sqm) by Uniqa Real Estate. Another notable deal took place in Szczecin, where Piastów Office Center (21,000 sqm) from the Blackstone portfolio was acquired by Investika and Bud Holdings.
By the end of March, deals worth a total of €350 million were at various negotiation stages, which confirms increasing investment activity and is expected to result in significantly higher volumes in Q2 and Q3, adds Kocerba.
Banks Are Focusing on Asset Quality
Banks’ appetite for financing office investments mirrors investor interest. Financial institutions assess risk and potential withdrawal based on current and projected demand for such assets.
“At the moment, we can describe banks’ approach to office investment financing with one word: selective,” says Mira Kantor-Pikus, MRICS, EMBA, Head of Equity, Debt & Alternative Investments at Cushman & Wakefield.
The most favored assets are relatively new buildings located in Warsaw. Notably, around 52% of the total A/B-class office space in Poland was built before 2015. For older office properties, banks place strong emphasis on primary energy efficiency and the planned decarbonization pathway, Kantor-Pikus explains.
When it comes to construction financing, it largely depends on the pre-let rate, the developer’s brand and experience, and the exit strategy planned for the investment.
For existing prime office buildings, average financing levels reach 50% of market value, with 25–30-year amortization periods. The financing term is usually slightly shorter than the WAULT (Weighted Average Unexpired Lease Term). The average interest margin for prime assets ranges between 2.0–2.5% annually, with an arrangement fee of approximately 1% of the loan amount. The base rate is 1M or 3M EURIBOR, and about 70% of the loan is typically hedged using interest rate swaps (IRS) or options, adds Kantor-Pikus.
For the acquisition of older buildings, banks often also offer decarbonization financing to support capital expenditures needed to upgrade the asset to meet ESG standards.
Source: managerplus.pl
