The forecasted rebound on the investment market is confirmed by the results of the second quarter of 2024. The total value of commercial real estate investments in Poland during this time exceeded 1.3 billion EUR and was the highest quarterly value in over a year. The office sector accounted for the largest share of transactions – 46%.
The total transaction volume in the first half of 2024 amounted to 1.8 billion EUR and was 80% higher than the comparable period in the previous year.
Increased investor activity can also be seen in other countries in the region. The volume of investment transactions in Poland, the Czech Republic, and Romania in the first half of the year reached close to 3 billion EUR, which at this stage represents 75% of the total value recorded in all of 2023.
“The current improvement in sentiment in the investment market is associated with the strong condition of the Polish real estate market and positive macroeconomic indicators, especially when it comes to interest rate cuts by central banks. The European Central Bank cut interest rates in June, and the Bank of England followed suit a few days ago. The U.S. Federal Reserve is expected to begin reducing interest rates later this year, which should further improve sentiment in the investment market and increase liquidity in the second half of 2024,” says Dorota Lachowska, Director of Market Research at Knight Frank.
“Favourable conditions and a stabilizing macroeconomic situation in Poland are encouraging institutional investors to return. Opportunistic investors, who do not allocate a lot of capital, still dominated in the first half of 2024. There was also a significant part of transactions involving Polish capital, which accounted for over 10% of the total volume in the first half of the year,” explains Michał Grabara, Director of Capital Markets at Knight Frank.
The record-high result was achieved by the inflow of capital from the CEE region, which accounted for 30% in the first six months of 2024, but this result was influenced by a single transaction – the acquisition of six shopping centres by Czech Star Capital Finance for 285 million EUR.
As a result of this transaction, the share of the retail sector in the total volume increased to a level unseen since 2018, amounting to 30%.
“There is also growing interest in office projects, which accounted for 46% of total volume in the first half of the year. Just like in the case of retail properties, the increased interest in the office sector is driven by a large transaction, namely the purchase of a 49% stake in the CPI portfolio by the British firm Sona Asset Management. It’s worth mentioning that we see increased investor activity in the office markets in regional locations. A prime transaction in office properties in Poznań, i.e. the sale of the Nowy Rynek E investment by Skanska, was finalised for 79.3 million EUR,” adds Michał Grabara.
The increase in the share of the retail and office sector in the investment volume implies a decrease on the warehouse sector side. For the first time since the outbreak of the pandemic, it recorded a result below 20%. Investor interest in this market segment remains high and reflects the strong growth potential of the Polish market in a European context.
The rental housing sector has steady prospects. In the first half of 2024, the investment volume in this segment was almost 130 million EUR, accounting for 7% of the total investment volume.
After a period of increase in previous years, returns in the first two quarters of 2024 remain relatively stable. However, the number of transactions with prime properties is still very limited, and return rates presented are based on market sentiment. Nonetheless, with an improvement in market sentiment in the coming quarters, a downtrend is expected.
Source: https://ceo.com.pl/ozywienie-na-rynku-nieruchomosci-komercyjnych-w-polsce-rekordowy-kwartal-86502
