The year 2024 proved to be significantly better than the previous year for commercial real estate investments. It is estimated that the total value of investments exceeded €4.5 billion, compared to just over €2 billion in 2023. This growth was driven by market corrections, which allowed modern properties to be purchased at more attractive prices. Another key factor propelling market activity was the reduction in interest rates within the Eurozone. Further rate cuts are expected, likely boosting investment activity in commercial real estate even more in 2025.
Significant Transactions Across Sectors
In nearly every sector of the commercial real estate market, major transactions took place. For example, in the office sector, the sale of the Warsaw UNIT building to Swedish company Eastnine AB marked the largest transaction of its kind in Europe this year. Other notable deals included the sale of the P180 project by Skanska to INVESTIKA Real Estate Fund and its joint-venture partner BUD HOLDINGS, as well as the sale of the Studio B building by Skanska to Stena Real Estate AB. However, the pool of investors for core assets remained relatively narrow, consisting mainly of entities from Scandinavia and the CEE region. Investor numbers were still lower than before 2023, especially compared to the pre-pandemic period.
A Time for Attractive Investment Returns
In 2024, the office market offered a rare opportunity to acquire high-quality properties at relatively attractive prices, a chance many investors seized. Local capital also increased, seeking opportunities such as buildings with high vacancy rates or those suitable for repurposing (e.g., as student housing or residential units). These assets often traded below their replacement costs. The supply of new office buildings was highly constrained, with developers cautious about new projects. This situation is expected to attract investors both in Warsaw and in top-tier assets across major regional cities. In 2025, a rise in private Polish capital entering the market is anticipated.
Activity in Specific Sectors
The industrial market remained consistently active, with significant competition among investors. One notable transaction in Q3 2024 was the sale of the Diamond Business Park portfolio in Warsaw, Stryków, and Gliwice. In the retail sector, numerous deals focused on retail parks involving both international and local capital from the CEE region. Two standout transactions were the acquisitions by NEPI Rockcastle: Magnolia Park in Wrocław for €373 million and Silesia City Center in Katowice for €405 million.
The Living sector also saw transactions in rental housing and student housing projects, though greater activity in this area is yet to come. The sector primarily operates in Polish złoty, and further interest rate reductions in Poland are still awaited. The residential market showed a cooling in sales volumes, prompting some developers to consider selling entire buildings to funds investing in PRS (private rented sector). In 2024, significant hotel transactions also took place, including the acquisition of the Cloud One Gdańsk hotel on Wyspa Spichrzów by Invesco Real Estate.
Increasing Investor Interest
Expected further interest rate cuts and the subsequent reduction in financing costs are likely to stimulate greater capital activity in the commercial real estate market. A positive trend is emerging, with more investors viewing the Polish market favorably and a growing number of inquiries from investment funds. The Polish market boasts strong fundamentals, and returns on investments in Poland are relatively better than in Western Europe. In 2025, we anticipate high activity in the industrial market, where the investor pool is robust. The office market is also likely to see a gradual return of capital. Additionally, the Living sector is expected to experience increased activity. Overall, 2025 may be an even more dynamic year for commercial real estate investments than 2024.
Author: Przemysław Łachmaniuk, Co-Head of Living, Director – Investment Properties – Capital Markets Poland, CBRE
Source: Manager Plus