With 30 finalized transactions, the third quarter of 2024 brought a notable revival in the Polish market. By the end of September, the value of the investment market reached 2.7 billion euros, marking a near 60% increase year on year. Following another interest rate cut by the ECB, we are witnessing a return of large transactions involving institutional capital. The third quarter saw 7 portfolio transactions, which account for almost 50% of the total investment volume in the third quarter; 2 of these exceeded 100 million euros. Three new investors entered the market: Arete and Greykite, who acquired warehouses in key logistics centers in Poland, and the Emira Property Fund, which purchased shares of DL Invest.
While office and commercial transactions dominated the first half of the year, the warehouse market notably rebounded in the third quarter, thanks in large part to 3 large portfolio transactions. Consistent with earlier predictions made by Avison Young, investments in office spaces in regional markets also gathered pace, accounting for over 20% of the total office volume in the first three quarters of 2024. Moreover, prime city center office asset transactions also made a comeback – Swedish investors purchased Studio B in Warsaw and Nowy Rynek E in Poznań. Investments in the retail sector maintained momentum and were focused on retail parks and convenience-type facilities. However, the volume in this sector was dominated by the sale of the Cromwell shopping center portfolio, which accounted for almost 50% of the volume in the sector in the first three quarters of 2024. It’s worth noting that the retail sector has already surpassed the total result achieved in 2023 and continues to advance.
Key numbers:
– 2.7 billion euros – total investment volume in the first three quarters of 2024 (965 million euros in the third quarter alone)
– 86 transactions in the first three quarters of 2024 compared to 57 transactions in the same period in 2023
– A 60% increase in volume year on year
– 14 portfolio transactions – 4 exceeding 100 million, 7 finalized in the third quarter of 2024
OFFICE SECTOR: Return of the Regions
Investors continue to focus on office assets in the capital, but regional markets are also attracting significant interest, accounting for 23% of the total volume of office investments in the first three quarters of 2024. In Warsaw, transactions are evenly spread – 38% in terms of volume in central locations and 38% in areas outside the city center. Finally, prime transactions in city centers made a comeback – Stena Real Estate AB purchased Studio B in Warsaw, and Eastnine acquired Nowy Rynek E in Poznań. Meanwhile, 4 of 9 transactions in the third quarter took place in the Mokotowska Business Zone. Furthermore, the third quarter of 2024 signaled a potential return of prime transactions with capitalization rates below 6%. The largest office transactions remain CPI shares sold to Sona Asset Management and the purchase of Studio B by Stena Real Estate.
WAREHOUSE SECTOR: Back in Favor
In the first half of 2024, the warehouse market experienced a significant slowdown, with the total investment volume dropping below 300 million euros. However, a strong rebound occurred in the third quarter, with warehouse investments surpassing the entire first-half result. In the first three quarters of 2024, the warehouse sector accounted for 27% of the total investment volume, with 5 significant portfolio transactions. Of these, 2 that exceeded the 100 million euro threshold were made in the third quarter. In terms of transaction locations, the Big Five dominated, accounting for over 75% of volume in the sector. Additionally, three new investors entered the market in the third quarter: Greykite, which made the largest transaction in the sector, buying 3 Diamond Business Parks in Silesia, Warsaw, and Central Poland; Emira Property Fund, acquiring part of the shares of DL Invest, and Arete, which purchased Panattoni Park Zgorzelec in the Lower Silesia hub.
RETAIL SECTOR: Retail Parks Still on Top
Commercial sector transactions achieved a total volume of 614 million euros in the first three quarters of 2024. Retail parks and convenience-type facilities remain invariably popular assets and accounted for over 50% of the number of sector transactions. However, shopping centers led in terms of volume with a 67% share. Among the transactions, there were also portfolio ones, 2 of which pertained to shopping centers. The sale of the Cromwell portfolio remained the largest transaction in the sector and accounted for almost half of its volume.
RESIDENTIAL SECTOR: Record Transaction
In the first three quarters of 2024, 10 transactions were closed on the residential investment market for a total amount of approximately 320 million euros. 9 of these pertained to the private rental sector (PRS), and 1 was related to the private dormitory sector (PBSA). Warsaw still led the market with 7 transactions, while the remaining 3 took place in regional markets – 2 in Krakow (projects by Heimstaden Bostad and Xior Student Housing) and 1 in Wrocław (AFI Home). A standout transaction during this period was Dom Development’s sale of the Metro Zachód project, which includes 500 PRS units, making it the largest transaction in the residential sector to date.
WHAT’S NEXT?
“The positive mood was clearly felt at this year’s EXPO. Poland remains a stable and attractive market for real estate investment. We’re observing the entry of many new entities into the market, and we anticipate the return of large institutional funds. Many properties in various sectors are currently in the proposal, due diligence, and even final stages. The office sector is particularly active, especially in the Mokotowska Business Area, as well as in several regional markets, as the prices there are more attractive to buyers. Retail parks continue to be seen as safe assets, very popular among investors. In the warehouse sector, sale and leaseback transactions are picking up pace.” – comments Marcin Purgal, Senior Director, Investment at Avison Young.
Source: https://ceo.com.pl/rynek-inwestycyjny-nieruchomosci-komercyjnych-w-polsce-raport-q3-2024-r-17962
