Poland A window for investment opportunity

Market analysts predict an increase in interest in property investment in CEE in the coming years, especially in Poland, the largest property market in the region.

Despite a slowdown in cross-border capital flows and a general deterioration of liquidity in global markets, the CEE region remains attractive to investors and its strong fundamentals suggest that investment activity will increase. CEE has been a major beneficiary of the logistics boom over the past decade, but now is the time to diversify investment portfolios. Investors' attention is turning to real estate from the broader residential sector, office purchases are emerging, but the most important criterion is whether a project meets ESG requirements.
David Inskip, head of EMEA Research at CBRE Investment Management

On the other hand, Dorota Strauch, CEE lead and head of Research at Raiffeisen Bank International, points to the importance of consumption for Poland's economic recovery, supported by EU funds, which should have a positive impact on domestic investment.

A focus on consumption and smart use of EU funds can have a positive impact on investment in 2024. The Polish economy is recovering at an unspectacular pace, but in a regional context the outlook is still rather optimistic, with GDP growth of 3.1 pct forecast for 2024 and 3.8 pct the following year.
Dorota Strauch

The low level of domestic institutional capital and the withdrawal of global capital is a challenge for the Polish property investment market. However, such a situation is very attractive to players from neighbouring countries.

This was particularly evident last year. To put it simply, without the influx of capital from countries in the region, which was responsible for the majority of transactions on the Vistula, the investment market would have almost dried up for good.
Dorota Wysokińska-Kuzdra, senior partner at Colliers

Among the active players on the Polish investment market are investors from the Baltic States.

Poland currently offers attractive investment opportunities and the chance for organic growth for medium-sized buyers. As a regional investor, we benefit from the fact that Western capital is much less active. Like any investor, we are interested in the right choice and the best possible time to invest. It is a buyer's market at the moment and we are acquiring properties with very attractive return parameters.
Paulius Stulgaitis, chief investment officer at Lithuania's Eika Asset Management

In addition to Baltic investors looking for opportunities in Poland, entities from the Czech Republic are also very active.

Czech funds are usually interested in buying individual properties. They invest a dozen, a few dozen to maybe EUR 100 mln and often in the office market, which is broader and larger in Poland than in the Czech Republic. In addition, yields on Polish properties are 150-200 basis points higher than in the Czech Republic, which attracts funds whose shareholders are looking for double-digit returns. There is enough attractive real estate in Poland and if investors cannot find opportunities in Warsaw, they will find them in Gdańsk or other regional cities.
Radek Kucera, founder and managing partner of Grafton Property Partners in the Czech Republic

The current market situation is very conducive to opportunistic buying, and some Western funds are already making such deals.

The fact that the existing players are no longer active is an opportunity for us, but when we make new investments, we always think about the exit horizon. We cannot rely on local capital for the time being, so market liquidity is very important to us. The Polish market has very good macroeconomic fundamentals and has proven to be an attractive investment over the last decade.
Colman McCarthy, partner at Signal Capital Partners

Buyers from the region and opportunistic players will not immediately restore the investment market to its full glory. Poland will have to wait for that, but there are signs of improvement.

Although interest rates have the potential to move downwards, they are still at relatively high levels, which favours opportunistic activity. At the same time, we are witnessing a narrowing of the gap between buyers' expectations and sellers' possibilities. The investment market in Poland is experiencing a period of activity characterised by numerous smaller transactions as well as occasional large deals, often backed by American capital. These larger investments are a glimmer of hope for the return of major international players to the Polish property market.
Marcin Juszczyk, managing partner and deputy president of the Board of Capital Park and chair of the ULI Poland