Spatial planning reform reshapes Poland’s land market

Poland's investment land market is undergoing a significant transformation due to new spatial planning reforms.

Emil Domeracki

The key takeaway is that predictability and clear planning status are now paramount, overshadowing traditional factors like location and initial price.

Emil Domeracki, partner and Board member, Land Development Advisory, at Walter Herz, explained: “The investment land market is entering a phase of clear selection, in which sites with predictable development potential are gaining an advantage.”

Properties with established local zoning plans, confirmed zoning and development conditions, or those explicitly designated for certain uses in the new comprehensive municipal plans will be highly valued.

Investors are shifting their focus to land assets that offer certainty throughout the development process, minimizing risks.

Demand for 1-2 hectare plots in smaller cities with good visibility and road access is strong, driving the retail land market.

Despite a general slowdown in office development, central Warsaw remains an exception due to high demand for prime space and limited supply.

Land in Poland's "Big Six" logistics hubs and sites suitable for manufacturing (especially in western and southern Poland) are seeing stable or rising prices, driven by growing occupier activity and the nearshoring trend.

Access to electricity, telecommunications, and proximity to power grids are becoming crucial, particularly for data centers and energy storage facilities.

Those investors capable of conducting comprehensive feasibility analyses that consider regulatory stability, administrative timelines, utility access, and environmental/social risks will thrive.

On the other hand, plots without clear designated uses or those awaiting final decisions from the new comprehensive municipal plans will be difficult to sell and face significant discounts.

Some developers have already begun selling off project portfolios due to market slowdowns and planning reform uncertainty.

There is virtually no demand for land for shopping centre developments.

High vacancy rates are limiting interest in land acquisitions outside central Warsaw.

Environmental permitting, especially for complex projects, can take a year or more, posing a challenge.

Securing sufficient power capacity is becoming a significant hurdle for many developments.