The Polish commercial property market has reconfirmed its status as an investment hotspot despite the one-year-long war in Ukraine, the runaway inflation and the global economic turmoil. In 2022, total investment transactions reached over EUR 5.8 bn, an increase of EUR 100 m on the previous year’s volume. Offices reclaimed the position as the top-performing sector after two years. Report authors from BNP Paribas Real Estate Poland anticipate investment volumes for 2023 to remain on a par with last year and the long-term transactional activity to be driven by the billions of euros that Poland is likely to receive from the EU’s budget.
Many buyers remain very cautious. As a result, prime yields for almost all asset classes moved out by around 0.25 pp at the end of last year. This suggests that investors are taking account of the possibility that pessimistic scenarios might materialize. At the same time, the yield growth trend, especially for office and industrial assets, appears to be strongly constrained by falling supply levels and high construction costs.
says Mateusz Skubiszewski, Head of Capital Markets, BNP Paribas Real Estate Poland
In estimating the investment values of many asset classes, especially of office and industrial properties, buyers strongly focus on tenant quality and stability. Another important factor is the average unexpired lease term. An in-depth analysis of these factors will help reduce risks to cash flow stability. But even despite the uncertainty at play, Poland continues to be targeted by investment funds, particularly from the United States, Germany and South Africa. It was capital from these regions that dominated the Polish market in 2022. Another notable trend was the growing inflow of capital from other CEE countries.
says Marta Gorońska-Wiercioch, Associate Director, Capital Markets, BNP Paribas Real Estate Poland.