Poland’s commercial real estate investment market stabilizes in H1 2025

Poland’s commercial real estate investment market showed signs of stabilization in the first half of 2025, with total investment volume reaching EUR 1.7 billion by the end of June, according to BNP Paribas Real Estate Poland’s latest report Review: Investment Market in Poland, Q2 2025. The report highlights a growing contribution from domestic capital, which is becoming more active across various segments of the market.

Although investor sentiment showed modest improvement in the second quarter, overall activity remained subdued. Transactions were primarily smaller in scale, reflecting the cautious approach adopted by market participants amid geopolitical uncertainties and ongoing economic challenges.

Mateusz Skubiszewski, Head of Capital Markets at BNP Paribas Real Estate Poland, noted that investment volumes in the first half of the year represented about 45 percent of the five-year annual average, indicating a tempered but steady recovery trajectory.

The industrial and logistics sector remained the most active, attracting EUR 694 million in investment—a 136 percent increase compared to the same period in 2024. The largest transaction was the sale and leaseback of the Eko Okna portfolio, totaling 264,000 sqm, acquired by Realty Income for EUR 253 million. Other significant deals included AFI Europe’s acquisition of the AFI Home Metro Szwedzka complex in Warsaw for EUR 76.2 million and Reico IS EAM’s purchase of LPP’s 103,000 sqm distribution center in Bydgoszcz for EUR 75.8 million.

Office investments totalled EUR 411 million, while the retail sector recorded EUR 322 million—marking declines of 49 percent and 36 percent respectively year-on-year. Despite this, BNP Paribas Real Estate expects retail investment to rebound in the second half of 2025, driven by anticipated large-scale transactions.

Investor caution continues to limit the number of high-value deals. The first half of the year saw only one transaction exceeding EUR 250 million. High financing costs and a persistent gap between buyer and seller price expectations have made core assets less accessible, particularly to cross-border investors. Many are choosing to focus on smaller, lower-risk assets with more predictable returns.

Skubiszewski believes the second half of the year may see increased activity, supported by expected interest rate reductions, which could lead to yield compression and renewed interest in real estate as an investment class.

Transactions in the EUR 40–100 million range accounted for the largest share of investment activity, totalling EUR 769 million—a 137 percent increase year-on-year. Deals under EUR 20 million amounted to EUR 293 million, reflecting a 16 percent decline. Large-scale deals over EUR 100 million totalled EUR 254 million, down 65 percent from the previous year. This pattern reinforces the trend toward smaller, more risk-averse transactions.

European investors accounted for 59 percent of total investment volume in the first half of the year, followed by U.S. capital at 23 percent, Middle Eastern funds at 12 percent, and African investors contributing 2 percent. Notably, Polish investors have increased their activity and market share, indicating rising confidence in the domestic market and a stronger appetite for local commercial real estate assets.

Yields remained stable across all major asset classes. Prime yields were recorded at 6.25 percent for offices and warehouses, 6.50 percent for shopping centres, and 5.25 percent for logistics assets serving the e-commerce sector.

Karolina Wojciechowska, Director of Capital Markets at BNP Paribas Real Estate Poland, noted that the stability in yields suggests a market expectation of declining financing costs. However, high capital costs continue to constrain development activity, limiting the supply of new, fully leased assets. She added that upcoming funds from the National Recovery and Resilience Plan could provide a much-needed boost to market dynamics and economic growth.

Source: BNP Paribas Real Estate Poland