Poland's property market is experiencing both pressing challenges and emerging opportunities, according to Solivan Partner Bartosz Miszkurka, from the refinancing woes of established projects to the burgeoning demand for residential and student housing and the impacts of legislative reforms.
"The most pressing issue we're facing is the challenge of refinancing existing projects developed a few years back," Miszkurka begins. "These properties, particularly shopping centers and office buildings, are now in a dire financial situation with the rents generated being insufficient to cover the financing provided by banks years ago." According to him, "this has led to a two-stage response from property owners: some are successfully renegotiating loans, while others, unable to adjust the financing terms, are forced to sell their properties."
On a more positive note, Miszkurka reports that there are "indeed bright spots in the landscape. The residential property market, especially student housing, is booming. This growth is fueled by high demand from both local and international students, with Poland hosting around 100,000 students from abroad," he explains. The demand for "high-quality, well-located accommodation that meets European standards is strong," he says, and major players with significant financial and resource capabilities are stepping in to meet this demand. "Another positive development is the rise of retail parks. Unlike the past focus on developing huge shopping centers outside city limits, the trend now is towards mid-sized and smaller buildings in towns across Poland, making retail more accessible," he adds.
Looking at it from a law-making standpoint, Miszkurka reports that Poland is "in the midst of a significant legislative reform, particularly concerning local zoning plans. A new legislative act based on the main law was introduced last September, generating a mix of anticipation and concern among market players," he says. "There's fear that this new regulation will complicate the process of obtaining new building permits and zoning decisions in certain areas, potentially slowing down development projects. Many believe that the government will need to amend this law or extend deadlines to avoid market disruptions, especially since local zoning acts such as stadiums are set to expire by the end of 2025, which could bring development to a halt if new acts are not adopted in time," he explains.
Finally, looking at the entire picture, Miszkurka says that he feels the market to be at a crossroads of sorts, "facing both significant challenges and opportunities for growth. The demand for residential and rental properties will continue to drive development, particularly in student housing. It should be pointed out that, in 2023, banks and non-bank institutions lent to Poles over 25% more than in 2022. The value of mortgages granted increased the most, by as much as 45%. However, the legislative environment needs careful navigation to ensure it supports rather than hinders progress," he opines. "The development of retail parks also presents a promising area for investment and growth; while there are hurdles to overcome, the prospects for Poland's property market remain positive, with ample opportunity for innovative solutions and strategic investments," he concludes.
