H1 2012 in a nutshell as per Colliers’ report:

General overview

  • In 2012 activity on the investment sites market is expected to remain stable, what is confirmed by the results of the first half-year.
  • The volume of transactions is growing; however, it will not reach the value of transactions recorded before the crisis. In years 2006-2007 transactions worth PLN 1 billion were concluded on single regional markets.
  • Investors willingly buy land for office and residential development. On such investments they have released 85% of their funds, 10% of funds buyers dedicated for retail investment sites and 5% for industrial investment sites.
  • 80-85% of purchases of land under residential and office development takes place in Warsaw.
  • Consistently areas well-prepared for the investment process in terms of technical, legal and planning conditions are priced relatively higher. Good location is another factor increasing the value.
Proces and transactions

  • Since the beginning of 2012 the value of transactions on the investment sites market under office, retail and residential development reached circa PLN 800 million. This constitutes 60% of expenditures incurred in 2011, which amounted in total to PLN 1.2-1.3 billion.
  • In most of the cities transaction prices are decreasing. Statistically, the price of land needed to build 1 m² of residential usable space in the first half of 2012 was lower than in 2011: by 25% in Kraków, by 23% in Poznań and Łódź. The land for office development became cheaper in Katowice by 27% and in Wrocław by 26%.
  • In comparison to 2011 the average transaction prices in the Capital City declined respectively at least among the largest Polish cities. For investors opting for an office investment site purchase, prices went down by 8% and remained at a similar level for residential investment sites.
  • Prices of retail development sites normalized and it seems that in the coming months they will be rather stable, both for sites for shopping centres and retail parks. 

Despite high supply, demand for investment sites has not been fully met, preliminary due to lack of sites meeting requirements of developers. The unfavorable location or shape of the plot, which prevent effective management of the property, are the main reasons why some of the sites are not subject to sale.

In case of retail investment sites, plots located in cities with more than 20,000 inhabitants are becoming increasingly popular. The land acquired in smaller towns is intended for small retail parks.

Developers cannot afford freezing money, that is why they buy such plots, on which they can start with the investment process as soon as possible. Nowadays the investments are planned short-term – they are expected to begin and end within 5 years due to less stable situation on the market. If there are any problems with the site that can be solved in a relatively short time, a conditioned preliminary sales agreement is concluded.“ – comments Daniel Puchalski, Associate Director, Land Department, Colliers International.

Colliers' forecasts
  • 2012 is a good time on the investment sites market. The volume of closed transactions should be larger than last year.
  • In 2013 the investment sites market may slightly slow down compared with 2012, and undoubtedly this will happen in 2014.
  • In the coming months we will observe a continued interest in land intended for office development, especially in Warsaw and Wrocław, but also in Kraków and the TriCity. The demand for residential land in major cities will be also recorded, however mainly in Warsaw.
  • As a result of new regulations (Developers Act) that became final and valid in April 2012, residential developers began the process of consolidation, as only the largest and most financially stable companies will be able to meet the requirements imposed by the legislator. As a result, some of the smaller development companies may be offered for sale or will seek joint venture opportunities in the market and new investment offers will appear on the market.