Polish investors bolster presence in commercial real estate

Polish capital is increasingly asserting itself in the country's commercial real estate market, steadily growing its share in investment activity, according to Bartłomiej Zagrodnik, managing partner and CEO of Walter Herz.

Bartłomiej Zagrodnik

Initially focused on older, value-add properties for their own operational needs, Polish investors have recently shown a significant increase in acquiring prime assets.

From around 2% of transaction volume four years ago, Polish capital's share reached about 9% in 2024 and nearly 20% by last year. When considering all transactions, Polish capital accounted for over 30% of all investments in 2024.

Office properties, particularly in Warsaw, Wrocław, and Kraków, are currently most popular. Examples include Syrena Real Estate acquiring premium Warsaw offices and Sando Office's €40.3 million purchase of Brain Park B in Kraków.

Polish investors are also active in retail (especially retail parks and convenience assets) and logistics/warehouse properties, often seeking assets with conversion potential or those requiring modernisation to increase value.

Unlike large international funds, Polish capital rarely competes for the most expensive "core" assets. Instead, private investors, entrepreneurs, family offices, and foundations (often using their own capital combined with favourable bank financing) focus on small to mid-sized assets, valuing relationships, local market knowledge, and the ability to actively enhance property value. Many transactions are executed off-market.

These investors don't just seek stable rental income but actively aim to improve lease structures, change asset use, upgrade technical standards, optimise operating costs, or prepare properties for refinancing/resale.

Commercial real estate is viewed as a crucial tool for wealth preservation, portfolio diversification, and generating long-term income (typically 6–10% annually), offering a hedge against inflation and stable cash flow. Prestigious properties also boost owner image.

Family foundations play a vital role in managing generational wealth, succession planning, and reinvestment, making commercial real estate a fitting asset for these strategies.

This strengthening position of Polish capital is expected to continue, with Polish investors utilising more direct and flexible structures compared to many foreign counterparts.

Despite this growth, Poland still lacks a widely accessible instrument similar to Western REITs for a broader investor base. However, domestic capital has developed its own models, using direct acquisitions, special purpose vehicles, family foundations, closed-end funds, and joint ventures.