Poland Strategy is key

In today’s rather challenging environment, what does the landscape for financing or co-financing real estate investments look like? What are the most complex aspects? And what can be done to overcome these obstacles as efficiently as possible?

As is the case in many other sectors, banks remain open to offering attractive financing terms for top-tier projects, including prime real estate. That said, in mBank’s view, a key success factor that both determines and facilitates financing is having a clear strategy for the asset. This encompasses positioning, optimal utilisation of the property in the market – such as tenant selection – or, in the case of older buildings, modernisation, redevelopment, or improving energy efficiency. These elements ensure the long-term value and appeal of the property, both for owners and tenants. As a result, these attributes also enhance the asset’s attractiveness to financial institutions.

Rising expectations from both financial institutions and tenants, combined with increasing market competition, make it crucial to present a credible development outlook for the asset and to document the sponsor’s capability to execute the strategy. These are now essential success factors in discussions with financial institutions.

Referring to an acquisition financed by mBank just two weeks ago – how difficult is it to secure financing for this type of investment? What conditions must be met to convince a financial institution to support such a project?

In the case of the Zaułek Piękna project, mBank’s decision to provide financing stemmed from a combination of several elements, including the project's unique location, a comprehensive repositioning strategy for the asset, and a thorough modernisation program aimed at achieving high energy efficiency. Importantly, the transformation is being managed by Syrena Real Estate, an experienced firm with a successful track record of delivering similar projects in the Warsaw office market.

From our perspective, the key factors that enable financing for such projects include the preparation of a detailed and credible development strategy for the asset, along with the sponsor’s proven ability to execute that strategy.

How does mBank currently assess the state of the market? What can we expect in the coming months?

Our outlook on the Polish real estate market for 2025 remains positive. The pressure from high interest rates – both in the eurozone and recently in Poland – has eased. At the same time, the limited supply of new commercial space, coupled with relatively stable demand, mitigates the risk of negative fluctuations in property values. These elements should support further stabilisation and an increase in transaction volumes in 2025.

Naturally, we are aware of certain risks, such as those associated with tariff policies in international trade relations, which could slow down investment activity. On a more optimistic note, we are pleased to observe the growing share of domestic capital in real estate transactions. Another strength remains the banking sector, which is prepared to support real estate financing, as well as the expanding private debt market.