Country Report Poland Q3-2018
“I fear that projects will take longer to complete.”

Dear readers,

It is noteworthy how investment interest in the Polish real estate market has grown. That was clear at the EXPO REAL trade fair in Munich. Above all, international investors are looking more closely at Poland. There is a particular focus on office and logistics properties. But residential property construction is also of interest to many investorsbecause they want to diversify their portfolios to the greatest possible extent. The current conditions in the Polish real estate market could hardly be better, and the continued high level of our REECOX reflects that. However, a certain amount of scepticism is advisable when making forecasts: On the one hand, the lack of workers in the construction industry is leading to ever higher building costs. On the other, the scandal surrounding the company GetBack is having a negative impact on the market for corporate bonds, so that many investors are struggling to raise capital. I fear that this will result in projects taking longer to complete.


Your Beata Latoszek

Contact

Ms Beata Latoszek
Managing Director Poland

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

Polish Real Estate Economy Index maintains its high level

The Polish Real Estate Economy Index remained largely stable in the third quarter. Compared to the previous quarter it decreased by just 0.4 %, outperforming the Euro Score As with the Euro Score, there was a relatively large decline in September.  The current level of the index, at 188.3 points, continues to be historically high.

WIG 20 positive, real estate market indicators falling

The initial REECOX variables have developed in opposite directions.
On the one hand, the leading share index WIG 20 performed positively. While at the end of September it had fallen by 2.3 % compared to the previous month, to 2,285.1 points, it had also risen by 7 % overall compared to the previous quarter because of the positive development in July 2018.

Meanwhile, the WIG real estate index continued its decline. It fell by 2.8 % and 2.6 % respectively compared to the previous month and quarter, to its current level of 2,033.9 points.

The Polish business climate index also declined. It decreased by 1.1 % compared to the previous month, and currently stands at 107.7 points. There was also a negative development in the real estate index resulting in a loss of 2 % compared to the previous quarter.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2018

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-1807/1808/18Q3-18Delta (%)
Q2-18 / Q3-18
DE
eq
up
eq
eq
eq
310.7
314.9
316.3
312.8
0.7
GB
do
do
up
upup
up
219.0
218.8
218.8
216.5
-1.1
PL
up
do
do
eq
eq
189.1
190.8
189.8
188.3
-0.4
NL
up
do
eq
eq
eq
200.4
201.5
200.5
199.3
-0.5
FR
up
do
do
eq
eq
237.7
238.9
237.9
236.2
-0.6
ES
dodo
do
dodo
eq
eq
204.1
200.7
198.8
196.4
-3.8