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A bridge between east and west


1 November 2014

In just 25 years, the Polish economy has developed into a competitive capitalist market economy and along with it, the country’s real estate market has evolved into a mature sector with ample investment opportunities.

If we compare Poland to other members of the European Union, especially to Mediterranean countries such as Spain or Greece, we can say that in times of the recent crisis, Poland is doing very well.

A post-communist member of the European Union (EU), Poland is the only economy in Europe which has avoided the recession following the global economic crisis. Whilst GDP in the EU fell by 0.4 percent on average, Poland witnessed an increase of 0.6 percent.

According to the DTZ Poland Investment Market Update for H1, 2014, in the first quarter of 2014, Polish GDP increased by 3.4% y-o-y, mainly due to a higher level of domestic investment and an increase in individual demand. “Among the most important factors behind the economic recovery in Poland are improving business confidence, a decrease of the unemployment rate and low interest rates, which have triggered demand for loans and an overall improvement of the financial situations of Polish households. These factors have managed to sustain the gradual growth of the Polish economy, and offset negative influence of the recent developments in Ukraine,” the report reads.

In the first half of 2014, the economic revival was accompanied by a gradual decline in the level of unemployment, which stood at 12.5%, says DTZ. The growing demand for labour in Poland also led to an increase in the average gross monthly salary in the enterprise sector, up 3.5% y-o-y at PLN 3,943 [USD 1,186].

Furthermore, due to the overall improvement of the economic situation in Poland, in the first quarter of 2014, the zloty appreciated against the euro, decreasing imbalances in the current account and an easing of the European Central Bank’s monetary policy.

Lastly, FDI in the first three months of 2014 increased significantly, amounting to EUR 1.8 billion [USD 2.3 billion], compared with the same period of 2013, when FDI stood at EUR 182 million [USD 230 million]; growth was driven by the economic revival in the Eurozone and the improving economic situation in Poland, DTZ reports.


Poland is a strategic link way to Russia and Europe and a corridor to East European countries. Not surprisingly, this is having an effect on the country’s attractiveness as an investment market.

According to DTZ, as much as EUR 1.39 billion was invested in Poland’s commercial real estate market in the first half of 2014, which represents a growth of almost 10% in comparison with the corresponding period in 2013.

“The continuing high level of investment activity is in line with the general market trend observed in the majority of European countries and reflects the improving opinion of investors about the economic situation. Entities investing in real estate are more willing to deploy their capital and turn towards markets where they stand to achieve higher yields (including Poland),” DTZ reports.

But let’s look at the factors that make Poland an attractive market for investment in general.

According to Sławomir Majman, Director of the Board, Polish Information and Foreign Investment Agency (PAIiIZ), these include economic and political stability of Poland, educated, competent and productive human capital, a favourable location in the centre of Europe, and a 38-million strong Polish consumer market – one of the biggest in Europe.

Furthermore, there are several incentives for investors looking to place capital into Poland. The country is also named the third best quality location in the world (after China and the USA) for manufacturing projects.

Lastly, Poland’s status as a member of NATO and the European Union make it a reliable and important business partner, says Majman.


Since Poland’s gradual transformation from a socialist-style planned economy into a market economy, a process which started in 1989, the country’s real estate market has begun to develop alongside the economy and today, 25 years onwards, is said to be on par with the rest of Europe.

Commenting on the advantage of Poland as a real estate investment market compared to other CEE markets, and the rest of Europe, Majman said:

“Poland has a large number of expanding cities, which stands out among the rest of Europe. Compared to other CE countries, Poland stands out in terms of quality, volume and price of modern space across all [real estate] sectors.

Particularly the Polish office sector offers better prices for modern spaces than other European countries, Majman stated.

“Poland has the largest office market in CEE. A comparison of the capital cities in CEE shows that Warsaw is clearly the largest market, with almost 4.0 million sqm of space, followed by Budapest (3.2 million sqm), Prague(2.9 million sqm), Bucharest (2.0 million sqm) and Bratislava (1.5 million sqm),” he said.

“The Polish real estate market may be regarded as mature and demanding. Investors appreciate how stable it is – not just when it comes to legal regulations, but also with regards to specialised expert advice; advisory services in this market (legal, tax, commercial and technical) are highly specialised,” Majman added.


Why should real estate investors turn to Poland?

As previously mentioned, compared to other CEE countries, Poland stands out in terms of volume of modern space across all sectors. And as the economy develops, the same applies to the commercial real estate market, Majman stated.

Attractive opportunities in Poland’s real estate market stem from a variety of sources, and exist across all sectors.

“Pinpointing the golden rule of property markets, Poland has a very convenient location in the centre of Europe. It is also one of the world’s top spots worldwide when it comes to location of Business Process Outsourcing (BPO), Shared Service Centres (SSC), Research & Development (R&D), Information Technology (IT) and other back-up function offices, which all need office space.

“The retail scene has evolved from stand-alone retail warehouses into a diversity of retail formats, including urban malls, factory outlets, neighbourhood centres and retail parks.

“The warehouse and logistics market in Poland, which follows the country’s major transportation corridors, totals 7.5 million square metres,” Majman said.

To put things into perspective, in 1989 in Warsaw, office space could only be rented in the Palace of Culture and Science, and in the building of the Marriott Hotel. In 2004, tenants already occupied 2.5 million sqm of modern office space whilst today, Poland has 6.5 million sqm of office space, with nearly one million sqm construction, Majman explained.

Looking a the logistics sector, while in 1996, the total supply of warehouse space in Warsaw was only 30,500 sqm, in 2004, there were already one million square meters, and in 2008, this figure stood at five million. Today, the number has already reached nearly eight million square meters, said Majman.

The European Union further impacted on the development of the Polish real estate market; the development of road infrastructure based on EU funds contributed to the rapid development of the logistics sector.


The Polish government is actively trying to further increase investment into various sectors of the Polish economy. The sentiment in Poland’s real estate market is partly dependent on the country’s ability to do so.

“The ability to attract investors will increase the demand for office space. If more companies settle down in Poland, more office space is needed, and this will keep a positive trend in the real estate market.

“If we are talking about the future it would be good to add that an increasing number of investments will improve the condition of the whole economy. More jobs for people will enable them to provide for a convenient place for them to live in,” Majman said.

As Europe’s real estate industry continues its upward growth trend for 2014 in general, it is more confident about its prospects and its ability to improve profits, which applies to Poland as well, Majman concluded.