Commercial property in Poland: why the market is becoming more active
Commercial property in Poland is becoming increasingly attractive to local investors. Their market share almost doubled in 2024. The reason for the activity of Polish buyers is the withdrawal of a number of institutional investors.
Economic difficulties forced many large international investors to leave the Central European market. However, the sector was not empty for long: buyers from Poland and neighbouring countries took their place. Investors from the Czech Republic, Lithuania and Germany are interested in local commercial property. In addition, the market is receiving significant capital from the US, which continues to grow.
The role of local investors in boosting the commercial property in Poland
By 2022, Polish investment companies accounted for only 2% of total commercial property acquisitions. In the first half of 2024, however, their share rose from 6% to 12%. Polish investors are now the fourth largest investors in the sector, while the UK remains the leader.
Polish capital enters the sector in a variety of ways, including:
– buying shares and bonds of property developers;
– investing in debt funds;
– equity loans;
– convertible loans.
Some investors prefer to buy land for joint projects. Others buy commercial properties to rent them out.
Polish investors are careful when choosing a property. They are interested in location and cost. Local investors prefer low-cost assets with growth potential, such as properties that need renovation. Such properties can then be resold at a higher price.
The Polish capital is active in the retail sector. Freestanding shops and retail parks are popular, especially for food chains. In the office segment, buyers are targeting old buildings that will be profitable after modernisation. Sometimes, properties are demolished to change their functional purpose.
Experts also note interest in the hotel sector. Almost all significant purchases are made by local companies.
Despite the increase in Polish capital, investors face a number of problems. The country’s legislation restricts investment in commercial property. Poland cannot create REITs, which would allow more capital to be attracted to the commercial sector. As a result, local players prefer to operate in the residential property market, where there are more opportunities to make money.
Analysts see the increased activity in the local commercial property market as a positive sign. Local investors are willing to invest in the country and believe in the sector’s potential. In the long term, the market will get a boost if the government approves the creation of REITs. The authorities are already working on this.