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Poland Real Estate Report Q1 2012
Business Monitor International, Jan 2012, Pages: 47
Business Monitor International's Poland Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Poland's Real Estate industry.
Poland is one of few major economies in Europe to have escaped recession, although it is vulnerable to any downturn in the neighbouring eurozone.
Economic growth is, notwithstanding, expected to continue for this year and next with substantial foreign direct investment in particular going into the office, retail and warehousing sectors.
Most of the key players in the development sphere are transnational companies that operate across the region. Even so, many are openly stating that Poland is their best market at the present time.
Polands centre-right Civic Platform government was re-elected with a working majority for four years in November 2011, and while it may seek to reduce public spending this is felt unlikely to affect infrastructure investment.
Key factors affecting the real estate industry include:
- There are numerous projects either planned or under construction, but not so many as to create a potential glut of new property.
- The economic fundamentals are attractive. We are expecting real GDP to grow by 3.5% in 2012.
- The building of new infrastructure including roads, rail and the Warsaw metro line across the country has opened up viable new areas for all sectors of the property market and retail and other developments are now being seen beyond major urban centres.
- There is sustained demand, including from service providers who are already established or are looking at expansion. Retail property growth is fuelled by high retail sales. Investment sentiment continues to be very positive with transaction volumes reaching 91% of the 2010 total by Q311, JLL has said.
The risks for the real estate market are essentially economic:
- As growth is based on exports, should the external economic picture deteriorate more quickly than we currently expect, this would have a harmful effect on the Polish economy (and naturally its need for commercial space).
- The Tusk administration will seek to cut spending to bring the deficit-to-GDP ratio below the EUmandated 3.0% in 2012, from the 7.8% in 2010 and the 6.2% forecasted for 2011, although this is unlikely to hit the infrastructure sector, where relatively poor conditions still hamper the countrys growth.
- Economic upheaval in the eurozone would affect the exports on which Poland relies (and so its wider economy) even though it is not a member of the single currency.
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