For the commercial real estate, this year has been in line with predictions and forecast, and can be perceived as the time of stable development in every sector of the market.

The year of 2016 has been one of the  best in the history of the commercial real estate market. Good economic results, effective acquisition of new investors, in particular in the e-commerce and manufacturing areas of the warehouse sector, dynamic development of common services in the office sector, as well as high internal consumption in the retail sector have positively influenced all segments of the commercial real estate market. In addition, quite a large liquidity in the financial markets and the chance for higher returns on investments when compared to other Western European countries have led to prosperity. – says Renata Osiecka, Managing Partner at AXI IMMO.
In the office segment, we could observe increasing supply of office space in the capital, and according to the latest report of CBRE on the capital office market size in the third quarter of 2016, office space exceeded
5 million sq. m., which means that Warsaw has the same amount of space as Amsterdam, Dublin or Barcelona.

Regional office markets are dynamically growing and still attract tenants from the BPO/SSC sector - in the near future, also Kraków and Wrocłas should reach the magic number of 1 million sq.m. – says Kamil Tyszkiewicz, Manager of the Office Space Rent Department at CBRE.

Over the past months, we have seen the process of diversification of retail space. Standard shopping centres are changing their offer, tailoring it to younger and younger consumers, and newly developing concepts are “convenience” centres and “retail parks”, which perfectly fit the environment. Dynamically developing shopping streets are more and more demanded along with the increase in the maturity of buying habits, which is also determined by the interest of tenants, up until now not present on the Polish retail stage.

Constant and very dynamic growth is visible in the warehouse sector -  according to the latest report “Poland Industrial Market View - Industrial and Logistics Market in Poland after the 3rd quarter of 2016” prepared by CBRE, this sector is in a very good condition. In first three quarters of 2016, a total of 970 000 sq. m. of modern warehouse space were introduced to the market, and 920 000 sq. m. are under construction. The size and constant development of the market pleases developers and encourages them to further investments. Magdalena Szulc, Director at SEGRO (Central Europe), confirms the optimistic mood in the industry, as well as the good condition of the warehouse sector: – Constant interest in warehouse space has led to the fact the overall resources have already achieved the size of almost 11 million sq. m. When it comes to the level of vacancy, it is at a record low, around 6%, which further increases the appetite of developers on new investments.

High activity of developers indicates that this year will probably be a record in terms of the size of newly built spaces. The warehouse sector has always been considered the litmus test of economy. These
results are pleasing, especially after the uncertainties in the first months of the year, associated with the new Polish Government.

The changing world has never been closer - political scene and real estate

What will come to mind when thinking about 2016? The most important international events include Brexit and the selection of Donald Trump for the President of the United States. We are witnessing the rearrangement of political forces in the European Union, which will have to redefine its policy after the largest economy, namely the United Kingdom, leaves the Union. What will happen with the financial and economic centre of the EU - London? We do not know.  It is equally difficult to estimate what changes will occur in the global economy when Donald Trump will become the 45th President of the United States. All these changes, along with those that we have in Poland, share some common ideas of national economy. However, in this day and age, when we are dealing with the free movement of capital, development of technology, high quality of life, as well as the awareness of business societies, it is hard to imagine that these ideas could influence the development of global and national economies.

We should be aware and observe not only our market and political changes, but also the activities on the international stage.

Political changes require the markets to react and adapt. A good example is the investment market in Poland, which, after the general elections in 2015, was characterized by some degree of uncertainty. Currently,
investors and financial institutions seem to be optimistic. This is confirmed by Arkadiusz Rudzki, Managing Director, Skanska Property Poland. – At the beginning of the year, we had a lot of queries about the
political situation in Poland, but the subject died down and is not mentioned in conversations. In March, during this year’s MIPIM trade fair, we had the chance to meet Deputy Prime Minister Morawiecki, who told us about the new plans of the Government. For foreign funds, an important element when making investment decisions is the possibility to formulate assumptions associated with the legal and economic
environment of the country in the long term. It is worth noting that financial institutions from Western countries recognize the economic growth of Poland, which has not experienced recession for 25 years.
It is important for them that the forecasts for the years 2016-2017 are optimistic and predict GDP at 3.5% and 2-4% in the long-term perspective.

World 3.0 - any greater challenges than politics?

Commercial real estate markets are pretty traditional, not only when it comes to expected returns. A trend worth mentioning in the context of the development of this segment is the ubiquitous use of modern
technology and innovations. Already the presence and use of modern technologies is evident in every sector of the commercial real estate market: there are more and more advanced and intelligent office buildings, offering their users the ability to manage office space (e.g. booking meetings, adjusting the shape of the seat, choosing a parking space) by using a smartphone app. Younger generations entering the labour market force developers to design buildings equipped with state-of-the-art systems.

 – The demand for new applications allowing better navigation through buildings, booking a conference room, table in the canteen or a parking space is not just a fad, but the actual need for the future. – says Ewelina Kałużna,  Rent and Portfolio Management Director at Skanska Property Poland. There are office projects equipped with beacons, energy-efficient cars for rent or intelligent co-working systems.

The growing e-commerce sector affects not only the design and marketing communication at regular shopping malls or office buildings, but it is also visible in the warehouse sector. Modern warehouses, equipped with intelligent order management systems already exist in Poland. Now we need delivery time optimization for the products purchased on-line, which will have a huge impact on the logistics sector.

Future perspective - new markets, investors’ needs, promotion

The main consequence of the changes will be increased caution of investors when making decisions on new investments. This economic situation is our chance, in particular when it comes to the promotion
of the Polish economy in the international area.

The growing lack of availability of attractive investment areas in verified locations, as well as the new Act on agricultural land create a unique opportunity for new regions.

– We will witness the formation of new business locations in the warehouse and office sector. The decline in the availability of workers in major logistics-office centres is leading BPO companies and manufacturers to seek new locations, with available workers and competitive prices. Bydgoszcz, Kiece, Białystok and Zielona Góra will have their moment in the spotlight. – says Renata Osiecka.
Also Magdalena Szulc, Director at SEGRO (Central Europe),  notices this trend: – Locations near large cities and major transportation hubs will still be important due to the great potential of the local market, as well as the best logistical efficiency.

The coming months will be interesting, firstly, we will observe the market influenced by so many variables. At present, it is difficult to predict the future. There are more questions than answers. But all the data suggests that the Polish real estate market is mature enough to remain safe. In the case of Poland, the position of the government is crucial - we have to create a stable and friendly environment for investments. Investments in Poland is a well-known and applauded topic among foreign investors, and all can benefit from the development of new markets. We will keep track of the activities and changes in each sector. We invite you to read our magazine.

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