The fundamentals of the Polish real estate market remain strong, even though 2023 has been another year of a range of challenges for each sector. Lower economic activity, still high project financing costs and rent indexation may have caused distress, but towards the end of the year there are early signs of stabilisation. Moderately positive sentiments are expected to carry into 2024, which is anticipated to see Poland’s macroeconomic situation improve. In the longer term, the property market will be shaped by megatrends, but above all by ESG and new technology. These are the key findings of the fifth edition of Cushman & Wakefield’s ‘Trends Radar’ report, which presents an outlook and growth trends for the Polish real estate market.
2023 has witnessed many significant changes which are expected to have a considerable impact on both the Polish economy and the real estate market in Poland. The outlook for 2024 remains moderately positive in many respects, bolstered by anticipated improvements to key macroeconomic indicators and, subsequently, a recovery in the property market. The real estate market is expected to be shaped in the long term by several megatrends, including sustainability which will fuel demand for energy-efficient and smart buildings, renewable energy and eco-friendly building materials. New technology and AI are also on the radar as they are likely to revolutionise the world as we know it,
comments Ewa Derlatka-Chilewicz, Head of Research, Cushman & Wakefield.
Stabilisation on the horizon for the office, retail and industrial sectors?
Looking ahead, we expect to see tenants and landlords in each property sector redesign their business strategies to better respond to hybrid working trends, changing consumer sentiment and growing ESG regulatory pressure. Poland is already a mature market, which means that some properties may be past their prime and no longer meet the current needs of their users. That’s why we expect repositioning, reformatting and upgrading of older buildings to gather pace in the long term,
explains Krzysztof Misiak, Head of Cushman & Wakefield Poland.
Residential market sees prices rise
The fundamentals of the investment market remain strong
The events of the last three years and high interest rates have caused a slowdown in buying activity, forcing market players to capture alternative investment opportunities to generate relatively higher returns. This has boosted interest in higher risk projects, such as value-add and development projects, distressed assets and repriced properties. The fundamentals of the Polish investment market remain solid, but it needs some time to regain equilibrium,
adds Krzysztof Misiak.
ESG as the common denominator for all real estate sectors
Market players are changing their perception of ESG as they become more informed and realise that properties with high sustainability credentials will be able to generate higher returns on investment compared to other assets. That is why ESG will become an integral part of investment fund strategies. Both tenants and investors - especially in the office sector - are increasingly targeting the most modern buildings in prime locations. The flight-to-quality trend is shaping up to be the defining theme of the real estate sector in the coming years. Hence the growing importance of developing market standards and harmonizing regulations, including with regard to the impact on property values of owners taking action or failing to act,
concludes Krzysztof Misiak.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in approximately 400 offices and 60 countries. In 2022, the firm reported revenue of $10.1 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), Environmental, Social and Governance (ESG) and more. For additional information, visit: www.cushmanwakefield.com.