Upcoming challenges for the Polish investment market

by Paulina Brzeszkiewicz-Kuczyńska, Research and Data Manager at Avison Young in Poland

The pandemic has barely subsided and the investment market is already facing new challenges due to the conflicts in the Ukraine. The end of the first quarter of the year was partly influenced by the new geopolitical situation, when the whole real estate market held its breath. Despite new circumstances, ongoing transactions are closing, which is reflected in Q1 2022 investment market results. Furthermore, especially regional investors from Lithuania, Czech Republic, Hungary or Slovakia keep their interest in real estate properties located in Poland.

“2022 recorded the third best opening of the year since 2016 in terms of investment transactions with €1.7 billion of total investment volume,” points out Paulina Brzeszkiewicz-Kuczyńska, Research and Data Manager at Avison Young in Poland. “This result was, however, determined by three extraordinary deals, which amounted to 75% of total volume transacted.” The first one was the office acquisition of The Warsaw Hub by Google. The second and the third regarded the sale of 50% of EPP portfolios by establishing two joint ventures. Thus, the retail and office sectors have the dominant share in the total investment volume structure, reaching 44%. This is a rather outstanding result after the strong domination of the industrial sector, which is mainly caused by lack of sizable industrial products on the market.

• 3^rd best opening
• € 1.7 billion – total investment volume in Q1 2022
• 23 transactions

Retail market

Retail parks and convenience schemes remain the most attractive retail assets among investors in Poland. Q1 2022 saw 9 retail transactions, of which 4 were retail parks and convenience centers. This confirms the stable position of retail parks and convenience retail properties on the Polish investment market. Among the sold retail parks, there were two prime properties transacted to the market newcomers: Park Handlowy Młyn in Wrocław sold to Lords LB, and Power Park Opole transacted to LEOFF Group.

The retail investment volume at the beginning of 2022 broke records. The total transacted volume stood at €728 million, which amounts to 73% of the total retail investment volume in 2021. The 44% share of retail in the total investment volume recorded in Q1 2022 is the merit of sales of 50% of EPP portfolios to form two joint ventures: Horse JV and Community Properties JV.

• €728 million total investment volume in the retail sector in Q1 2022
• 9 transactions
• 4 retail parks transacted

“The solid opening of 2022, as well as many ongoing transactions, confirm the stability of the real estate investment market. Transacted deals regarded both large and small properties in multiple sectors and the investment market also saw a few newcomers. Despite some turmoil, we expect that the investment market in Poland will continue to attract investors,” adds Paulina Brzeszkiewicz-Kuczyńska, Avison Young.