Offices and retail lead the way

In 2024, Poland’s commercial real estate market recorded impressive gains, with its total investment volume exceeding €5.05 billion. This represented more than a twofold increase year-on-year and was well above expectations. Large portfolio and single-asset transactions made a comeback. While this result remains below achievable trading volumes and market potential, investors are feeling a wave of renewed optimism. Offices and retail were the top-performing sectors, each contributing 32% to the total investment volume.

2024 saw 45 office transactions which totalled €1.64 billion, marking a fourfold year-on-year increase. Meanwhile, Poland’s retail transaction volume surpassed €1.6 billion, with the average size of transacted assets at 22,000 sqm, an increase of 7,500 sqm compared with the previous year.

Industrial and logistics assets came third in 2024, capturing a 25% share of the commercial real estate investment volume. They attracted over €1.26 billion of investment deals last year, up by around 30% on 2023. The main driver of this growth was US investors who invested over €350 million, accounting for nearly 28% of last year’s total.

The private rented sector (PRS) also garnered rising investor interest, with €340 million worth of transactions, marking a year-on-year increase of 170%.

“2024 ended on a very strong note for Poland’s commercial real estate investment market. However, its strong performance was driven primarily by four high-value transactions, mainly in the retail sector, including the sale of Cromwell’s shopping centre portfolio and two other shopping malls: Magnolia Park in Wrocław and Silesia City Center in Katowice. Another key contributor to last year’s investment volume was the sale of the Warsaw Unit office building. It remains to be seen whether similar transactions will occur in 2025. However, the Polish investment market has undoubtedly staged a recovery and is likely to see an uptick in medium-value transactions in the range of €10-50 million”, comments Mateusz Skubiszewski, Head of Capital Markets, BNP Paribas Real Estate Poland.

Outlook remains positive

BNP Paribas Real Estate Poland notes that falling interest rates in the eurozone are expected to fuel investment activity, with capital inflows from the US, the Czech Republic and France already rising. Positive macroeconomic forecasts for Poland, compared with the European average, along with anticipated fund disbursements under the National Recovery and Resilience Plan in 2025 and 2026 reinforce this optimistic outlook for the market.

Geopolitical uncertainty and the risk of tariff wars continue to impact the market, filtering through to real estate yields. Faced with these challenges, investors are increasingly opting for smaller properties with long weighted average unexpired lease terms (WAULTs). While German and Asian capital remain on the sidelines, domestic capital is showing increased momentum. Meanwhile, the Polish investment market is eagerly awaiting the adoption of REIT legislation, which would further stimulate investment activity.

Poland’s CRE investment market appears to have reached a point of equilibrium between buyers and sellers by the end of 2024. Yields for key asset classes moved out by another 25 basis points, with finalized and pending transactions suggesting that they have peaked during this phase of the economic cycle. Looking ahead, returns on investment in most asset classes are expected to rise significantly in the coming quarters.

2024 headline deals

• Retail

Poland’s retail sector recorded three big-ticket deals last year. Assets that changed hands included Silesia City Center (88,000 sqm) and Magnolia Park (100,000 sqm), acquired by South Africa’s NEPI Rockcastle for €405 million and €373 million respectively. Another major investment transaction was the acquisition of Cromwell’s portfolio comprising 219,000 sqm of retail space by Star Capital Finance from the Czech Republic for €285 million. This deal was brokered by BNP Paribas Real Estate Poland.

• Offices

Last year saw a resurgence of investor interest in office assets. The largest single asset deal of 2024 was Eastnine AB’s acquisition of the Warsaw Unit office building from Belgium-based Ghelamco for approximately €280 million. It was followed by Skanska’s sale of P180 in Warsaw to Investika Real Estate Fund & BUD Holdings for around €100 million. Another notable transaction last year saw Sona Asset Management acquire a 49% stake in the CPI portfolio, representing more than 315,000 sqm of office space.

• Industrial and logistics

The largest transaction to complete in 2024 was the acquisition of 7R’s portfolio by the Czech fund Investika for approximately €143 million, closely followed by White Star’s purchase of the portfolio of Diamond Business Parks in Gliwice, Ursus and Stryków for €132 million. The most active market player on the sell side was Panattoni, accounting for nearly 40% of the total investment volume, ahead of 7R with a 19% share.