Walter Herz: Capital cautiously returns to European real estate

The message echoing through the Palais des Festivals in Cannes is that capital is flowing back into European real estate; however, this is not a return to the enthusiasm of the pre-rate-hike era. 

Bartłomiej Zagrodnik

Instead, the market has entered a phase of refined selectivity, where investors are not avoiding risk, but rather pricing it with surgical precision, according to Bartłomiej Zagrodnik, managing partner & CEO at Walter Herz.

In Poland and the wider CEE region, investors are gravitating toward assets with high value-growth potential and stable, "prime" locations with credible rental growth.

Residential

The residential sector continues to be the most resilient and active segment of the European market. In Poland, there is a focus on plots suitable for 5,000–10,000 m2 GFA and for projects that allow developers to adjust the pace of construction to match real-time market demand.

Capital is heavily concentrated in high-liquidity hubs, specifically Warsaw, Krakow, Wroclaw, Gdansk, and Poznan.

Warsaw’s  Dominance

At MIPIM, Warsaw was frequently cited as a key reference point for the entire CEE region. Interest is particularly high for residential land in central districts and office assets with "value-add" potential. The primary draw remains Warsaw’s market liquidity, which continues to outperform other regional capitals.

The Office Rebound

After a period of uncertainty, the office sector is stabilising. With many new projects halted or postponed over recent years, a supply gap is emerging.

In Warsaw, prime locations are already seeing upward pressure on rents.

Investors are specifically targeting buildings where they can improve occupancy or capture rental growth.

Retail and Logistics

Retail parks have seen a surge in activity from CEE-based capital (Czech, Slovak, and Baltic investors) alongside French funds. The prevailing strategy is "buy and build"—acquiring single assets to assemble a portfolio for future institutional monetisation.

Efficiency remains the priority for logistics. While multiple sales processes are underway, the market is collectively waiting for the full-scale return of institutional core capital to drive large-scale portfolio transactions.

Beyond traditional bricks and mortar, MIPIM 2026 has highlighted the rise of data centres, R&D facilities, and healthcare real estate.

Poland as a Pillar of Stability

Conversations in Cannes suggest that the "Ukraine risk" has largely been priced into valuations, with more concern directed toward Middle Eastern instability and its global economic ripples. In this context, Poland is increasingly viewed as a stable, predictable port within the CEE region.