Warsaw City Report - Q2 2021

We have a pleasure to present the latest JLL report analysing current situation on the investment, office, retail, industrial and residential market in Warsaw.

August 30, 2021

Q2 2021 summary

Contrary to the fears of many market participants, the pandemic has not resulted in a significant investment volume decline. The split among sectors has, however, changed significantly. Investment demand in Poland during the first half of this year has maintained the strong levels of the last three years. In fact, the turnover for H1 was the fourth most active start to the year ever. The value of all investment transactions in H1 totalled ca. €2.5 billion, €855 million of which was concluded in the I&L sector – one of the main beneficiaries of the pandemic implications.

The uncertainty and changes surrounding working modes have directly affected the Warsaw office market. The most notable effect that has recently emerged is the ten-year low in developer activity in the capital city. Currently, there is only 370,000 m² under construction – the lowest level since 2010.

Although the Polish retail market is still struggling with the COVID-19 implications, forecasts look favourable compared to the rest of Europe. According to Oxford Economics, forecasts for Poland assume an increase in retail sales by 3.3% per annum until 2025.

Warsaw industrial market remains the largest industrial market in Poland with total existing stock of over 4.9 million m² (23% of total supply). At the end of June 2021, Warsaw construction pipeline stood at 394,000 m², which translated into 13% of total industrial space being constructed in Poland.

In terms of the residential sector, sales in H1 2021 were one of the highest in the history of monitoring – nearly 13,000 units. Due to sales exceeding current supply for the fourth quarter in a row, the size of the offer continues to decline. At the end of June 2021, there were 9,700 units on offer it was the lowest level since 2007.

Even though the first half of 2021 was marked by the prolonged government-imposed hotel closures, since January 2021, nine new hotels opened in Warsaw with a total of 1,700 hotel rooms. This constitutes approximately 8% of the existing supply. In addition, there are currently 13 new hotel projects in construction in Warsaw. These projects will add over 2,200 new hotel rooms to the market.

About Warsaw

Warsaw is the political, economic and cultural centre of Poland. The city is the seat of the Polish government, the parliament and most public administration institutions, as well as regional representatives of international organisations such as Frontex, the World Bank, the International Monetary Fund, and the European Bank for Reconstruction and Development, among others. It is coupled with a variety of businesses operating in the capital, both Polish and international.

Warsaw is the largest city in Poland and the eighth most populous capital city in the EU. The wider Warsaw metropolitan region is home to more than 2.5 million people and has a forecasted positive population growth. All this results in Warsaw being a vibrant office, residential and retail destination. Such vast scale of the capital also boosts the growth of the warehousing market in the city and its suburbs. There are a number of reasons why Warsaw is a fantastic place to invest – and why now is the time to invest here.

For several years, every quarter, we have been preparing an overview of each of the city's real estate sectors along with an investment commentary. We encourage you to download the report and familiarize yourself with the latest data. Our experts will be also happy to answer all questions about business opportunities offered by Warsaw – not only on the field of transactions, but also in the area of strategic consulting and business support.

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