Country Report Poland Q2-2022
“The area covered by logistics projects under construction is twice as high as in the previous year.”

Dear readers,

"The boom in the Polish logistics sector continued apace in the second quarter of 2022. The brisk demand for warehouse space is not only due to pandemic-related developments, but also to the relocation of business operations from Ukraine to Poland following the outbreak of the war there. At 4.5 million m², the area covered by projects under construction is twice as high as in the successful 2021 – which was already a record year. The appeal of the Polish logistics market for foreign investors has contributed to a 19 % year-on-year increase in transaction volumes. Rents are expected to grow by 30 % per m2 by the end of 2022. Yields remain stable in spite of an inflation rate of 15.5 %. By contrast, the office property market paints a more varied picture: compared to other cities, Warsaw accounts for the highest volume with 6.2 million m² of new, modern office space. However, only about 250,000 m² is currently under construction, 80 % of which is scheduled for completion by the end of 2023. The increasing popularity of working from home has impacted space requirements and consequently also the demand for new buildings. This has led developers to postpone new projects to future dates and to adopt a wait-and-see approach. This poses the risk of a supply gap for 2024/25 followed by potential rent hikes. This trend is having a positive impact on towns located in the surrounding areas. Large foreign companies are looking to the periphery, where the volume of office space is smaller but construction activity is brisker."


Your Beata Latoszek

Contact

Ms Beata Latoszek
Managing Director Poland

Phone: +48 22 828 02 53
E-mail: Beata.Latoszek@Deutsche-Hypo.de

REECOX Poland negative trend continues

Having already recorded a negative performance in the first quarter, REECOX Poland failed to recover in the second quarter of 2022: the index stood at 183.1 points at the end of June, which corresponds to a quarter-on-quarter decline of 3.6 %. However, the losses posted in the second quarter correspond to the second-lowest decrease when compared with other European countries.

WIG 20 blue-chip index suffers double-digit losses

Input variables were negative across the board. With a 5.9 % decline to 2,549.2 points, the WIG Real Estate share index was still relatively stable compared with many other European real estate indices. The WIG 20, Poland’s leading stock market index, was already substantially lower at the start of 2022. The downward price trend continued in April (-12.9 %) and, after a relatively unchanged performance in May (-0.8 %), continued its downward trajectory in June (-8.0 %) as the quarter drew to a close. At approximately 1,696 points, this was the lowest level (-20.5 % quarter on quarter) recorded since October 2020. Confidence among real estate experts surveyed for the Economic Sentiment Indicator (ESI) slumped for the second quarter in a row and stood at 96.0 points at the end of June, corresponding to a 2.1 % quarter-on-quarter decline.

Synopsis of Input Variables and Real Estate Economic Situations Q2-2022

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q1-2204/2205/22Q2-22Delta (%)
Q1-22 / Q2-22
DE
dodo
dodo
dodo
eq
upup
320.6
310.1
308.5
289.8
-9.6
GB
do
dodo
dodo
upup
upup
218.2
205.6
203.4
202.5
-7.2
PL
dodo
do
do
upup
upup
189.5
187.5
185.3
183.1
-3.4
NL
dodo
dodo
dodo
eq
upup
194.6
194.2
192.2
184.8
-5.0
FR
dodo
dodo
do
eq
upup
240.0
234.8
233.6
225.6
-6.0
ES
do
dodo
do
eq
upup
181.6
178.2
181.3
178.4
-1.7