PRS set to boom

In Denmark, the PRS accounts for close to 50 pct of the annual real estate transaction volume. Its share in the investment market in our region is just under 5 pct, but it is likely to grow by 10 pct in the coming years. In Poland, rental apartments account for around 15 pct of the country’s total housing stock (2.3 million out of 14.8 million units). The development pipeline intended for rent is estimated at 35,000 units, of which around 10-15 pct will be delivered in the next 12-18 months. The PRS market is being driven by demographic, economic and social changes which are yet to be seen in Poland. Most residential developers are just beginning to consider PRS projects on the back of very strong apartment sales.

Despite the Covid-19 headwinds, housing prices on the new build and resale markets in Warsaw and the countries largest cities have not fallen. This is mainly because demand remains relatively strong. A substantial proportion of affluent people have bank deposits that are paying virtually no interest at the moment and are trying to protect the value of their capital by buying apartments with cash.
Mira Kantor-Pikus, partner, equity, debt and alternative investments, capital markets at Cushman & Wakefield.

Poland is one of the countries with the fewest rooms per person in the European Union standing at 1.1 compared to the EU average of 1.6. The number of apartments per 1,000 people is just 80 pct of the EU average. It is estimated that there is a shortage of about two million apartments in Poland to satisfy demand.

The PRS is on the radar for all mainstream global fund managers working with pension funds, insurance companies and sovereign wealth funds from Europe and the US, and APAC funds to some degree. It is not clear, however, how many will actually include Poland as part of their European allocations.
Jeff Alson CE Partner, Capital Markets Group, Cushman & Wakefield