With a strong economy and positive forecasts Poland is still one of the most attractive countries in Central and Eastern Europe for investment. First quarter GDP reached 3.5% when compared yoy with the full year’s data expected at 3.7%.

Despite the volume and number of investment transactions during the first half of the year, investment activity in Poland is not slowing with a growing number of investors interested in the Polish property market.

^{Source: Savills European Research}

The volume of investment transactions in H1 2015 was €811m but the remainder of 2015 is expected to be more active in terms of the number and volume of transactions. This low volume of investment transactions in Poland is a consequence of limited supply of prime projects which are always favourable for some funds and are keeping the volume at a high level.

Five out of 20 transactions concluded in H1 2015 were domestic acquisitions with Griffin Real Estate led the way with €65m paid for Green Horizon which is an office building located in Łódź. The US investors e.g. Lone Star and Hines were also quite active during the first half of the year with ca. 35% of the volume, whereas investors from Germany and the UK were, once again, the key EU players in the market.

Source: Savills European Research

During the first half of the year, the volume of investment transactions in the retail sector was €271m (ca. 33% of total volume) but the majority were office deals with approximately 48% share in total investment volume. Prime shopping centre yields remain stable at ca. 5.5% for the best shopping centres in Warsaw, below 6% for dominant shopping centres in major regional cities and sub 7% for leading shopping centres in secondary cities.

In the leading regional office markets of Wrocław and Kraków, prime yields are now below 7%. In Poznań and Gdańsk, prime yields are slightly higher at ca. 7.50-8%. For less active markets like Katowice, Łódź or Szczecin there is still limited transactional evidence for prime yields, however, we estimate yields to drop below 8%. Prime office yields in Warsaw city centre are falling below 6%, whereas in Warsaw non-central locations, prime yields range from 7% to 7.5% depending on the asset type and location.