"Following past challenging years, marked by an investment market slowdown in 2023, 2024 results signal a return to stability with a hint of optimism. The total transaction volume in Poland during 2024 exceeded over twice that of 2023, reflecting a significant resurgence in market activity. “The return of investors to the commercial real estate market results from interest rate cuts initiated by the ECB and FED during summer, translating into more affordable financing”, comments Marcin Purgal, Senior Director, Investment at Avison Young.

Poland’s total investment volume for 2024 reached €5 billion, with Q4 alone surpassing the total investment volume of entire 2023. This remarkable growth was driven by the resurgence of large transactions, encompassing both portfolio deals and single-asset sales. “Notably, the 10 largest transactions accounted for nearly 50% of the total investment volume across 130 deals completed during the year. Similar liquidity and domination of several significantly large transactions were observed in 2022”, points out Paulina Brzeszkiewicz-Kuczyńska, Research & Data Manager

The office sector contributed one-third of the total investment volume in 2024, highlighted by the sale of Warsaw UNIT, marking the largest single-asset office transaction in Europe. In the retail sector, two major regional shopping centres, namely Magnolia Park in Wrocław and Silesia City Center in Katowice, represented half of the total volume. Meanwhile, the industrial and logistics segment saw an uptick in large portfolio acquisitions. Additionally, the year witnessed transactions involving 11 hotels and 13 residential schemes.

Highlights:

• €5 billion – total investment volume in 2024 (239% y-o-y)
• Q4 2024 results exceeded the 2023 total investment volume
• 130 transactions in 2024
• 10 largest deals responsible for nearly 50% of the total investment volume in 2024
   

Office sector: European-scale Warsaw deals and the comeback of regional cities

In 2023, investor interest surged in older value-add and opportunistic office buildings. By contrast, 2024 saw increased activity in core and core+ asset sales, particularly in Warsaw. This trend reflects market repricing, with asking prices aligning more closely with transaction values and current market conditions. Nonetheless, demand remains strong for older properties with the potential for functional changes, conversions, or adaptations to align with new market realities.

The most notable office transaction of 2024 was Eastnine AB’s acquisition of Warsaw UNIT, marking the largest single-asset office deal in Europe last year. However, the divestment of a 49% stake in the CPI portfolio stood out as the most significant in terms of investment volume, accounting for over a quarter of the total office sector’s results. Other major office buildings that changed hands in 2024 included P180, Studio B, and Lakeside. The latter was brokered by Avison Young experts, who co-represented the seller.

A notable trend was the resurgence of regional office markets. Of the 45 office sector deals closed in 2024, 13 involved assets in regional cities. This represents a substantial increase compared to the previous year when only two assets were sold in Kraków, driven largely by the attractive pricing of regional properties.

“Interestingly, the market is witnessing growing interest in the acquisition of office buildings by their occupiers. Notable examples include the purchase of Bokserska Office Center in Warsaw by Enter Air, Match Point B by GPoland, and Domaniewska 50A by Ryan Air, alongside several acquisitions by public institutions. We are aware of additional deals of this type being in their initial stages”, adds Marcin Purgal.

Domestic capital, responsible for nearly 40% of number of office transactions, is becoming increasingly prominent in the office investment sector, showing a rising appetite for smaller formats. This shift reflects a move away from residential investments towards commercial real estate.

Highlights:

• €1,6 billion – office investment volume in 2024 (382% y-o-y)
• 32/45 transactions closed in Warsaw in 2024
• The largest single-asset office transaction in Europe in 2024
• Polish capital is responsible for nearly 40% of the number of office transactions

Retail sector: Iconic shopping centres transactions

“The retail investment market represents 32% of the total volume transacted in Poland in 2024. This is a significant growth of 10 p.p. compared to 2023 results. Also, the acquired asset structure has changed, with considerable shift to regional shopping centres, including large prime properties”, points out Artur Czuba, Associate Director, Investment.

The retail sector concluded 2024 with a total volume of €1.6 billion, what is the highest result since 2019. The most significant transactions in the Polish retail investment market were the acquisitions of Magnolia Park in Wrocław and Silesia City Centre in Katowice by NEPI Rockcastle, representing 50% of the total retail investment volume. This is the same investor who purchased Forum Gdańsk in 2022. Another standout transaction regarded the shopping centres portfolio, divested by Cromwell to the Czech investor Star Capital Finance. Among other regional shopping centres transactions, there were Galeria Wisła in Płock or Centrum Galardia in Starachowice, wherein both these divestments Avison Young represented the sell-side.

While overshadowed by large shopping centres, retail parks continued to attract steady investor interest. In 2024, like in 2023, retail parks represented half of the total number of transactions, with Avison Young brokering over 20% of these deals.

Highlights:

• €1,6 billion – retail investment volume in 2024 (372% y-o-y)
• 2 prime regional shopping centres sold in 2024
• 12/32 transactions regarding shopping centres in 2024

Industrial sector: Resurgence of portfolio deals

The warehouse sector emerged as the dominant force in Poland’s investment market in 2023, constituting nearly half of the total investment volume. Thus,the growth recorded in 2024 wasn’t as spectacular as in other real estate sectors, which witnessed huge fluctuations.

In 2024, the industrial sector recorded an investment volume of €1.3 billion, primarily driven by portfolio deals. Among 7 multi-asset transactions representing over 50% of total warehouse volume, 2 were of Pan-European scale. This is a sign of the comeback of big multinational portfolios in the investment market. The majority of assets sold (excluding divestment of DL Invest’s shares) were located in major 5 Polish warehouse hubs.

“The narrowing price gap among market participants is expected to further accelerate growth in the industrial investment market. Additionally, the rising importance of nearshoring in Poland’s logistics market presents significant opportunities for continued market development. However, price disparities are becoming increasingly apparent between ESG-compliant properties and older assets", comments Bartłomiej Krzyżak, Senior Director, Investment.

Highlights:

• €1,3 billion – industrial investment volume in 2024 (127% y-o-y)
• 7/29 portfolio transactions in 2024
• 50% share of portfolio deals in industrial investment volume in 2024

PRS: 10 year anniversary

The Private Rented Sector (PRS) market in Poland has experienced a decade of growth, delivering almost 20,000 completed units, with an additional over 10,000 under development at the end of 2024. Throughout 2024, 28 new PRS projects were completed, contributing over 5,900 units to the market, 16 of which were located in regional cities in 2024.

The majority of new developments were introduced by already established PRS operators, with only 1 project delivered by the new market player, AP Słowackiego. Collectively, the 3 largest players, namely Resi 4 Rent, Vantage Rent, and Fundusz Mieszkań na Wynajem, currently accommodate over 50% of the existing PRS stock. The pipeline for 2025 includes the addition of another 6,500 units to the market, of which 70% is expected to be delivered in regional markets. In 2024, the residential market saw a total of 12 closed transactions in the PRS sector, achieving a record-breaking result of €344 million. The PRS deals were primarily finalised by already active market operators, with the exception of one new buyer,  namely Lew Investment, who acquired the Urban Home project from G City in Kraków. Notably, Sweden based investors were responsible for 50% of the total PRS investment volume.

Warsaw continued to lead the PRS investment market, with 9 transactions completed in the capital. Notably, 2024 also featured a portfolio transaction brokered by Avison Young, namely City Living’s package of apartments located in Warsaw, Poznań and Bydgoszcz.

Highlights:

• €344 million – PRS investment volume in 2024
• 12 transactions
• Domination of Warsaw market in transaction structure in 2024
• 1 portfolio deal

What to expect in 2025?

• Poland remains attractive to investors due to strong economic growth and solid market foundations
• We anticipate the trend of interest rate reductions to continue, accompanied by a relaxation of lending policies by banks
• Investment liquidity is expected to keep on improving further in all asset classes
• General attractiveness of smaller real estate format with long WAULT
• The increasing interest of REIT-type companies from Western Europe, as well as CEE and the Baltics
• Market transactions shaping new yield levels