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News Release


2009-2011 – Polish Office Market Forecast: Back to the Future?

Jones Lang LaSalle in cooperation with the Gdańsk Institute for Market Economics predicts the future of the office market in Poland

The health of the real estate market is closely linked to the economy. Despite discrepancies of economic forecasts regarding the expected rate of GDP growth, it is expected that Poland’s economy will grow slightly in 2009 and start to recover significantly from 2010. However, what will happen on the real estate market?
Jones Lang LaSalle presents the likely real estate market development scenario focusing of office sector, in its latest publication “2009-2011 Polish Office Market Forecast: Back to the Future?” . Having regard to the extended commentary on the likely economic situation in Poland, the report was prepared in cooperation with the Gdańsk Institute for Market Economics (Instytut Badań nad Gospodarką Rynkową) – well known Polish economic forecasters.
Poland’s main office markets are currently falling and will be slowly approaching the bottom of the rental cycle. John Duckworth, Managing Director Central & Eastern Europe, Jones Lang LaSalle commenting on the offices sector said: “The economic recovery forecast for 2010 and 2011, will impact upon the office market conditions over 2012 and 2013. It typically takes two years for the improvement in economic indicators such as GDP growth, level of employment/ unemployment rate and foreign direct investments to filter into the supply side of the real estate market. The main question is when finance sources will feel confident enough to reignite the growth in the Polish office market. Once this happens developers will return. The key is from their point of view is to strike a point in the cycle that matches rising occupier demand and limited supply. We estimate that projects delivered over H2 2011-2013 will fulfil these conditions.”
Tomasz Trzósło, Head of Capital Markets Central & Eastern Europe, Jones Lang LaSalle, anticipates that stagnation on the investment market in Poland looks set to continue throughout 2009 and possibly 2010. Tomasz said: “Investment activity of real estate investors was close to none so far in 2009 and it will take time until transaction levels increase anywhere near to pre-crisis levels. We do however observe an increasing number of investors’ enquiries about the investment opportunities and believe that this interest will start generating transactions in the future. Once a couple of transactions close and establish market pricing benchmarks, more investors would feel comfortable buying and this hopefully will steadily bring the market back to activity. We are however realistic about the timing of such improvements of the investment markets – it is likely that 2010 will be slow and materially more activity is expected only in 2011 and beyond.”
Bohdan Wyżnikiewicz, Vice-President of the Board, Gdańsk Institute for Market Economics added: “The Polish economy has proved to be the most resistant to the global crisis among European markets. Therefore it has a great chance to accelerate the growth in 2010 when the other markets start to recover. The key issue of the Polish economy is the balance of the public finances however it doesn’t influence significantly the investment processes of the Polish enterprises. After a slowdown period, we should expect more willingness from entrepreneurs to invest especially in sectors connected with export and services.”