Poland Leads the CEE Institutional Rental Market: Dynamic Growth and Promising Future in PRS and Student Housing

The institutional rental market is dynamically growing, becoming one of the most promising real estate segments in Poland as well as in the entire Central and Eastern Europe region. According to the report from Colliers: “CEE Living Sector. Emerging Trends and Opportunities in the CEE Living Market”[1], Warsaw is the clear leader here, with approximately 8,000 existing units in PRS-type facilities and plans to double resources in the next few years. However, the dynamic development is not limited to Poland’s capital – the number of premises in the build-to-rent segment is also growing in regional cities, including Wroclaw, Krakow, Poznan, Tricity, and Lodz.

Thanks to the growing interest of both local and foreign investors, Poland is becoming a key institutional rental market in the region, offering new opportunities for both developers and tenants. The nationwide growth of the PRS market in our country is impressive – over the past year, as many as 11,000 new units have been put into operation, translating to a growth of 112%. Currently, 20,900 apartments are available in this segment, with another 8,400 under construction.

“Poland stands out in the region not only for the number of PRS projects but also for the number of investments in this segment certified in terms of sustainable development in the BREEAM system. Investors are increasingly keen to implement ecological solutions, which directly result in lower operational costs and at the same time contribute to corporate goals related to the decarbonization of owned properties”, explains Dorota Wysokińska-Kuzdra, Senior Partner, Director of Corporate Finance & Living Services at Colliers.

Apartments Are Still Lacking

The demand for living space in Poland is already huge, and by 2050, cities such as Warsaw, Krakow, Poznan, and Gdansk anticipate further population growth.

“PRS funds are closing the existing supply gap through their operations. Moreover, the offer of institutional rental is aimed absolutely at every group of tenants, such as foreigners or people with pets, regardless of the period of the rental agreement”, says Michał Witkowski, Director of Living Services at Colliers.

Despite recent rise in residential property prices and difficulties in financing, Poland stands out with unusually high indicators of intent to purchase on the housing market, reaching almost record values.

“The Polish housing market has a very healthy structure. It caters to people who want to own apartments, individual clients who want to invest their surplus capital in rental properties, and entities that professionally handle rentals. Only a wide offer in each of these segments can ensure that apartments will continue to be available, whether a 30-year-old wants to rent it or a family wants to own it, or vice versa”, adds Michał Witkowski.

Finding Alternatives

Higher apartment prices are making institutional rentals increasingly attractive for people seeking stable and modern housing solutions. These include young professionals and families with children.

“PRS is the answer to changing needs and preferences of Poles. We are increasingly choosing the flexibility and convenience of renting instead of long-term mortgage obligations. More and more often, even when we own an apartment, we decide to rent in places that better suit our lifestyle”, explains Michał Witkowski.

Still Not Enough Student Accommodations

Further opportunities for the development of the institutional rental sector in Poland are indicated by the consistently strong demand for rental apartments in academic centers such as Warsaw, Krakow, Wrocław, and Poznań. Poland is already a leader in the PBSA (Purpose-Built Student Accommodation) segment in the Central and Eastern Europe region, seeing nearly 70% growth year on year. Currently in Polish cities, 5,400 units are under construction and another 14,900 are in the planning stage. The leading position in the PBSA market, in terms of size and development pace, is held by Krakow, which has over 3,500 beds in private dormitories, and nearly 2,000 more are under construction. Mata Sharma says Youre correct! the expansion of the private rental
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Similar Trends Across the Region

The rise in demand is contributing to the development of the PRS market in Romania, Bulgaria, and Hungary as well. Just like in Poland, the increase in home prices and difficulties in financing property purchases are fostering the development of the institutional rental market.

In Romania, where the PRS market has grown by 42% in the past year, Bucharest remains the leader, soon to exceed 3,000 PRS units, and further investments are being carried out. In Hungary, and especially in Budapest, the PRS market grew by 29% in the past year. Local developers such as Metrodom-Flatco Real Estate are carrying out new projects. Bulgaria, meanwhile, is still developing its PRS sector, with the largest projects currently taking place in Sofia. However, following the end of the pandemic, the growth in wages in Sofia significantly improved the ability to buy apartments, which has resulted in rising demand in the traditional housing market.

Leaders Are Changing the Market

The housing market and the PRS sector in the CEE-6 region are shaped by a small but influential group of players. Companies such as Heimstaden Bostad, AFI Europe, NREP, Kajima, G-city, Zeitgeist Asset Management, CTR Group and Kooperativa Vienna Insurance Group are expanding their operations and bringing innovative solutions to the industry. An example is Kajima, a leader and pioneer in the private dormitory market, and now the owner of the largest portfolio of private dormitories in Poland.

[1] The data in the report is up to the end of Q3 2024. The note includes data concerning Poland updated according to the situation in December 2024.