How is the Polish real estate market developing? A market commentary by Beata Latoszek, Managing Director of Deutsche Hypo – NORD/LB Real Estate Finance Warsaw.
The Polish commercial real estate market showed strong momentum in the first half of 2025. The transaction volume reached approximately EUR 1.7 billion, with more than EUR 1 billion recorded in the second quarter alone.
Logistics Remains the Leading Asset Class
Logistics continues to dominate, with a transaction volume of around EUR 700 million. New developments are progressing moderately: 1.5 million sqm of space is currently under construction – a 7% increase compared to Q1, but a 26% decline year-on-year.
Office Properties: Regional Markets Gain Traction
Office assets ranked second with EUR 411 million in transaction volume. The segment remains attractive to investors, although caution still prevails. Properties in central locations (CBDs and office hubs) are increasingly targeted through Value-Add and Core Plus strategies.
Notably, 13 out of 23 office transactions took place outside Warsaw, accounting for nearly 50% of total office investment volume. High-quality assets in regional cities with stable cash flows continue to appeal to both institutional and private investors.
Retail just behind office properties
Retail properties reached a transaction volume of EUR 322 million, making up 50% of all deals in the first half of the year. Demand is particularly strong for retail parks and convenience centers. Investors are also looking at dominant shopping centers in urban areas with solid fundamentals.
Trends: Flexibility and Redevelopment
A clear trend is the redevelopment of older assets: Investors are acquiring centrally located office buildings or shopping centers, demolishing them, and developing residential projects on the sites.
In the office segment, the flexible workspace market is growing rapidly. Given the high fit-out costs and evolving work models, the share of flex offices – currently at 4% – is expected to increase further.
Capital Structure: Private Investors on the Rise
Investment activity is currently driven by private capital, as institutional investors remain cautious due to declining valuations in their portfolios. This trend reflects broader global market dynamics.
Polish investors are becoming increasingly visible: More than one-third of office investment capital came from domestic sources, while their share in the residential sector reached 15%. The focus is on smaller, lower-priced assets, taking advantage of current market opportunities.
Outlook: Positive Signals Ahead
The prospect of interest rate cuts and stabilizing construction costs is expected to further stimulate market activity. Developers are regaining confidence to move forward with commercial projects.
Overall, market sentiment is positive. A recovery in investment activity and a rise in transaction volume are anticipated in the coming quarters. However, geopolitical and economic uncertainties remain a risk factor – so a degree of caution is still warranted.