From Emerging to Developed: How Poland is reshaping CRE in CEE

► Macroeconomic Resilience and Market Expansion

Monetary Policy and Economic Fundamentals

The Polish economy continues to demonstrate robust momentum, with real gross domestic product (GDP) forecast to expand by 3.5% in 2026, 2.9% in 2027, and 2.1% in 2028. 

This growth positions Poland as one of the fastest-growing major economies in the European Union, underpinned by private consumption, EU-funded investment, infrastructure projects, energy transition initiatives, defence allocation, and industrial modernisation. 

In the second quarter of 2026, economic activity was characterised by accelerating investment activity alongside moderating consumption growth. 

Headline consumer price index (CPI) inflation reached 3.4% year-on-year in August 2026, driven primarily by rising global oil and retail fuel prices. 

CPI inflation is projected to reach up to 4.0% near term and remain above 3.5% throughout the second half of 2026, with annual averages expected at 2.8% in 2026, 2.5% in 2027, and 2.9% in 2028. 

Consequently, the Monetary Policy Council (MPC) maintained the main policy rate unchanged at 3.75% in September 2026, signaling policy continuity but removing any hope for rate cuts in the last quarter of 2026. 

Core inflation remains moderated by slower wage growth and falling employment, while broader inflationary pressures are limited by modest minimum wage increases of 3% annually for 2026 and 2027. 

Geopolitical uncertainty from the ongoing military conflicts in Eastern Europe and the Middle East has reinforced household caution, with 76.9% of Polish households maintaining savings, while unemployment is forecast at 5.6% in 2026, 5.0% in 2027, and 4.7% in 2028.

S&P affirmed Poland's sovereign rating at A- with a stable outlook, whereas Fitch affirmed A- with a negative outlook due to general government deficit forecasts of 7.1% of GDP for 2026 and 2027, heavily influenced by concentrated military equipment deliveries.

Commercial Real Estate Dominance

Poland reinforced its position as the premier commercial real estate investment destination in CEE during the first half of 2026, attracting EUR 3.049 billion in total commercial real estate volume, representing 52% of total regional capital flows and marking Poland's strongest first-half investment performance since 2018. 

In the second quarter of 2026 alone, transaction volume reached approximately EUR 2 billion, recording the strongest single second quarter in Polish commercial real estate history. 

Sectoral distribution was led by retail assets, which generated EUR 1.018 billion across 20 transactions, followed by industrial and logistics properties with EUR 782 million across 18 deals, living and hotels at EUR 655 million, and offices at EUR 594 million across 23 transactions. 

Cross-border capital flows were led by Czechia at 23.6%, Germany at 19.0%, the US at 10.6%, Hungary at 6.8%, France at 3.8%, the UK at 2.2%, and South Korea at 2.2%. 

Simultaneously, domestic Polish capital accounted for 11.5% of investment volume, expanding its structural role as a primary liquidity provider in mid-sized and prime transactions. 

Prime yields in Warsaw stood at 6.25% for offices, 6.25% for shopping centres, and 6.50% for industrial assets, offering investors higher income returns and attractive entry yields relative to Western European markets.

Developed Status and Defence Innovation

Highlighting its structural evolution, S&P Dow Jones Indices reclassified Poland from an emerging market to a developed market, effective September 2027. Poland becomes the 27th constituent of the S&P Developed BMI, joining FTSE Russell and STOXX, which upgraded the country in 2018. 

In 2025, Poland ranked as the EU's sixth-largest economy with a nominal GDP of EUR 922.9 billion (exceeding USD 1 trillion), representing 4.9% of total EU GDP. Gross national income per capita reached USD 25.5 thousand in 2025, double its 2017 level of USD 12.7 thousand. 

Polish stock market capitalisation reached USD 292 billion, while household liquid bank deposits exceeded PLN 1 trillion, paving the way for the planned 2027 launch of Personal Investment Accounts (OKI). 

To advance industrial self-reliance, Poland's National Centre for Research and Development (NCBR) is allocating PLN 500 million under the EU Strategic Technologies for Europe Platform (STEP) programme. 

Funded through the European Funds for a Modern Economy (FENG), individual grants of up to PLN 140 million will support commercial companies and research consortia.

The funding spans two tracks focused on high-potential technologies and reducing third-country dependencies across artificial intelligence, cybersecurity, autonomous drone systems, electronic warfare, and military mobility.

► Residential and Living Sectors

Record Mortgage Activity and Market Acceleration

The Polish residential sector experienced a dramatic acceleration in mid-2026, fueled by a historic surge in mortgage originations and expanding housing supply. 

Second-quarter mortgage lending reached its highest volume since 2007, pushing cumulative first-half home loans over PLN 73 billion. 

This financing momentum spurred primary market activity, with new-build sales jumping nearly 50% year-on-year in August as buyers returned to the market. 

Notably, this organic demand recovery occurred without government support schemes or interest rate reductions, lifting developer sentiment to yearly highs and accelerating new residential starts across major urban centres.

Institutional PRS Expansion and Capital Flows

Poland's living and institutional Private Rented Sector (PRS) matured significantly, capturing EUR 655 million in capital investment during the first half of 2026. 

Sector institutionalisation was anchored by landmark portfolio trading across major regional hubs, setting a new benchmark for institutional scale and market depth. 

With operational stock expanding past 25,000 units and substantial development pipelines underway, the market continues to demonstrate long-term structural resilience.

Looking ahead, the planned 2027 launch of Personal Investment Accounts (OKI) could provide further support for institutional real estate vehicles and broader capital participation.

Rental Market Normalisation and Regulatory Oversight

Residential rental growth moderated in the second quarter of 2026, with annual asking rents stabilising after the aggressive expansion seen between 2021 and 2023. 

Even with this recent plateau, cumulative Polish rents remain 46% above levels from five years prior, keeping local housing affordability constrained. 

Simultaneously, government authorities are tightening oversight of short-term tourist lets through new legislation, similar to what has already been seen in Spain, Portugal, and Germany. 

The proposed framework mandates a central accommodation registry, introduces administrative fines of up to PLN 50,000 for non-compliant listings, empowers housing communities to ban short-term rentals by majority vote, and permits municipalities to establish restricted zones by 2028.

► Hospitality, Hotel, and Resort Markets

Operational Momentum and Urban Supply Growth

The Polish hotel market continues to demonstrate strong operational recovery and structural expansion, with total national inventory exceeding 2,600 properties and 334,700 available beds. 

Market growth is increasingly defined by quality, scale, and international brand penetration across major urban centres. 

Warsaw led CEE capital cities in new hotel supply expansion, growing room stock by 5.5% in 2025 with an additional 7.2% growth projected for 2026. This capacity growth was matched by robust demand, as visitor arrivals to the capital reached 12.1 million and airport passenger traffic expanded to 24.1 million in 2025. 

Warsaw achieved pre-pandemic occupancy levels of approximately 80% alongside record revenue per available room (RevPAR), driven primarily by rising average daily rates. 

Regionally, performance dynamics varied: Kraków's annual occupancy surpassed Warsaw's for the first time since 2019, the Tri-City recorded the country's highest average daily rates, and rapid room additions created temporary margin pressures in select regional markets undergoing inventory absorption.

Investment Discipline and Institutional Capital

Hotel transaction activity shifted toward a more selective and quality-focused investment climate following a strong 2025, when national transaction volume reached EUR 135 million across 12 properties. 

In the first half of 2026, hotel investment volume registered EUR 59 million across four transactions, representing a 24% year-on-year decline. Rather than indicating sector weakness, this moderating pace reflects heightened investor discipline, prime yield stability, and a focus on well-located assets. 

Institutional capital interest remains oriented toward upscale properties, portfolio acquisitions, and branded limited-service or aparthotel formats. 

Furthermore, European investor sentiment remains supportive, with assets meeting high environmental, social, and governance (ESG) criteria commanding distinct price premiums across the broader CEE region.

Resort Sector Scale and Holiday Home Pricing

Leisure destinations have experienced substantial long-term expansion, with hotel room capacity growing by over 80% in mountain resorts and 54% along the Baltic coast over the past decade. 

Average property sizes in resort zones have increased to roughly 90 to 100 rooms, driven by developer focus on larger integrated complexes with year-round wellness amenities. 

In tandem with commercial hotel growth, asking prices for new holiday apartments in premier resort locations hit record highs, surpassing average residential costs in major metropolitan areas. 

Top mountain destinations such as Zakopane reached average asking prices of nearly PLN 34,900 per square metre, while prime coastal markets including Sopot reached nearly PLN 26,800 per sq m. 

High valuations in these leisure hubs are sustained by affluent domestic second-home buyers seeking wealth preservation, coupled with acute land scarcity and environmental planning restrictions across alpine and lake districts.

► Office Sector and Repositioning Assets

Supply Constraints and Rent Divergence

The Polish office sector continues to adapt to structural supply contraction and acute market polarisation. 

Total modern stock across major urban centres reached 13 million sq m in mid-2026, though new completions remained subdued at approximately 119,000 sq m during the first half of the year. 

Construction cost inflation and elevated pre-leasing hurdles imposed by lenders have severely restricted new development starts, establishing EUR 17.00 per square metre as the baseline rent required for economic viability. 

Consequently, prime central office vacancy in Warsaw dropped below 6.0%, pushing top monthly rents to EUR 29.00 per square metre. 

In contrast, peripheral secondary submarkets and select regional cities face elevated vacancy levels exceeding 18% to 22%, creating tenant-favourable conditions and driving sharp performance divergence between central prime towers and aging secondary assets.

Asset Repositioning and Functional Conversion

Faced with high office fit-out costs ranging from EUR 600 to EUR 900 per square metre, occupiers are committing to longer lease terms of seven to ten years while prioritising environmental quality and central locations. 

With over 60% of existing capital stock exceeding ten years of age, asset owners are increasingly turning to strategic repositioning to address structural obsolescence. 

Over 500,000 sq m of office space in the capital has been decommissioned over the past five years. 

Where deep retrofits are unfeasible, obsolete peripheral stock is being systematically repurposed, with nearly half of converted space transitioning specifically into living, education, and healthcare uses, while conversions into hotel and data centre formats also remain relevant across peripheral submarkets.

Investment Recovery and Capital Inflows

Investment activity in the office asset class demonstrated a decisive rebound in the first half of 2026, generating approximately EUR 594 million across 23 transactions. 

Prime yields held firm at 6.00% to 6.25%, offering stable valuation benchmarks across primary markets. 

The buyer landscape was characterised by a strong presence of domestic Polish investors, who provided essential liquidity for mid-sized and prime properties, operating alongside re-engaging cross-border capital from Western Europe, Scandinavia, and CEE.

► Retail, E-Commerce, and Shopping Centres

Consumer Resilience and Operational Recovery

Poland's retail market is benefiting from strong macroeconomic fundamentals, with real consumer expenditure projected to grow by 3.3% in 2026. 

Retail sales accelerated through mid-2026, recording a 6.2% year-on-year increase in June, supported by ongoing real wage growth and stable household disposable income. 

Operational performance across physical retail venues rebounded firmly, marked by a 5.1% year-on-year footfall surge in June alongside positive tenant turnover trends. 

Simultaneously, online retail penetration has stabilised at 9.1% of total turnover, establishing a balanced equilibrium between digital and physical commerce. 

Prime shopping centre rents remained firm at EUR 100 to EUR 130 per square metre per month in Warsaw and EUR 40 to EUR 60 per square metre in regional cities, while retail park rents averaged EUR 9 to EUR 12 per square metre.

Retail Park Dominance and Asset Management

Modern retail inventory expanded past 14 million sq m of gross leasable area, driven by continuous supply additions across both major metropolitan areas and regional hubs.

Active construction reached over 600,000 sq m, positioning full-year delivery totals for potential decade highs. 

Development activity is overwhelmingly dominated by retail parks, which account for roughly 95% of space under construction as schemes increasingly penetrate smaller towns with under 20,000 inhabitants. 

Conversely, ground-up shopping centre construction remains subdued, with landlord focus shifting toward active asset management, modernisations, extensions, and the integration of food, beverage, health, and leisure concepts to sustain high footfall and tenant productivity.

Capital Allocation and Investment Leadership

Retail emerged as the dominant commercial real estate asset class in the first half of 2026, generating over EUR 1.0 billion in investment volume across 20 transactions and surpassing the full-year total recorded in 2025. 

Representing 34% of total commercial property investment, the sector benefited from lower operating costs and resilient private consumption. 

Dominant shopping centres accounted for approximately 72% of transaction volume, driven by equity stake acquisitions in prime regional assets, while retail parks and hypermarket sale-and-leaseback structures comprised the remaining 28%. 

Prime shopping centre yields held stable at 6.25% in Warsaw and 6.50% nationally, reflecting sustained investor confidence in well-positioned retail infrastructure.

► Industrial Logistics and Warehousing

Occupier Expansion and Supply Discipline

Poland's modern industrial and logistics stock expanded past 38 million sq m by mid-2026, solidifying its position as the largest warehouse market in CEE and accounting for over half of total regional inventory. 

Leasing activity experienced a historic surge, with gross take-up exceeding 3.5 million sq m in the first half of the year. Net take-up grew by 58% year-on-year to over 2.1 million sq m, reflecting a decisive shift from lease renewals to physical expansion and new leases. 

Demand was heavily driven by expanding Asian e-commerce platforms, alongside nearshoring trends across manufacturing, engineering, automotive, and fast-moving consumer goods sectors relocating production to Poland. 

Correspondingly, nationwide vacancy fell to between 6.3% and 6.6%, its lowest level since 2023. 

Developer activity remained disciplined, with space under construction moderating to 1.3 million sq m, over 60% of which was pre-let, successfully mitigating oversupply risks and constraining the availability of large-format units.

Investment Liquidity and Capital Selectivity

The industrial and logistics asset class attracted EUR 782 million in investment volume during the first half of 2026 across 18 transactions, representing a 13% year-on-year increase and securing 26% of all Polish commercial real estate capital. 

Large portfolio trades returned to the market, generating nearly half of total sector investment volume. 

Capital allocation exhibited a clear two-speed dynamic, as institutional investors prioritised long-let build-to-suit assets, cross-dock facilities, and long-term lease structures, while shorter-term multi-tenant properties faced greater underwriting selectivity. 

Prime logistics yields held steady at 6.50% in Warsaw and up to 6.75% nationally, with cross-border buyers led by capital from the US, France, South Korea, Sweden, and Czechia.

Strategic Drivers and Technical Upgrades

Long-term structural growth in Polish logistics continues to be reinforced by the nation's central geographical positioning, expanding transport corridors, and increased integration into European supply chains. 

Strategic public funding under European innovation initiatives is further bolstering dual-use transport networks, military mobility, and supply-chain-critical infrastructure solutions. 

Simultaneously, urban last-mile and small business unit formats reached 2.5 million sq m of stock, driven by rapid delivery requirements in major urban agglomerations. 

With industrial and logistics labour costs rising by roughly 9% to 10% annually, occupier selection criteria have shifted heavily toward high technical specifications, building energy efficiency, grid power availability, and automation integration.

► Data Centres and Digital Infrastructure

Market Capacity and Institutional Capital

Poland's data centre sector is undergoing rapid expansion, with total national capacity reaching approximately 703 MW in 2026 and projected to approach 1,000 MW by 2030. 

Driven by cloud adoption, artificial intelligence workloads, and regional data sovereignty, the domestic market is valued at USD 2.17 billion in 2026 and is forecast to expand to USD 4.29 billion by 2031, representing a compound annual growth rate of 14.6%. 

As traditional tier-one Western European markets face severe power constraints, institutional capital is actively rotating into high-growth secondary hubs, positioning Poland as a primary allocation target offering attractive yield premiums. 

Market expansion is being anchored by major global hyperscalers committing multi-billion PLN investments to build out regional cloud nodes, while record-low European vacancy rates continue to drive capital deployment into operational digital assets.

Grid Constraints and Regulatory Reforms

Power supply availability represents the primary operational bottleneck for digital infrastructure growth, particularly in the Warsaw metropolitan area, which faces an estimated grid power deficit of 150 to 200 MW. 

Historical speculative applications led to massive grid queues, prompting energy law reforms in 2026 designed to eliminate non-viable capacity reservations through tighter deadlines and increased connection fees. 

Consequently, market valuations now strongly favour brownfield sites with existing industrial power infrastructure over greenfield locations holding uncontracted applications. 

To accommodate long-term digital growth, the national transmission operator is executing a PLN 64 billion grid investment plan through 2034, extending high-voltage transmission lines to support 3 GW of data centre load by 2035.

Energy Efficiency and Heat Reuse

Environmental sustainability and grid integration are increasingly dictating asset design and operational viability across the digital infrastructure landscape. 

Upcoming regulatory frameworks are aligning data centre operations with municipal utility networks by establishing mandates for waste heat recovery. 

Estimates indicate that expanding national capacity could generate sufficient recoverable waste heat to supply up to 16% of Poland's district heating demand by 2035. 

This integration of power-intensive facilities with local energy infrastructure enhances environmental compliance, supporting long-term institutional investment across the sector.

► Life Sciences and Healthcare

Biomedical Growth and Market Scale

Poland represents CEE's largest pharmaceutical market and the sixth largest in the EU, supported by a national population of 40 million. Polish pharmaceutical sales reached USD 15.6bn (EUR 14.2bn) in 2021 and are forecasted to hit USD 23.8bn by 2026 and USD 33.3bn by 2031. 

Medical devices revenue is projected to reach USD 4.5bn by 2027. Sector expansion is guided by the Polish government's Development Plan for the Biomedical Sector (2022-2031), administered by the Medical Research Agency to provide research grants for domestic generic and biosimilar production. 

Regional Performance

Warsaw serves as the primary regional clinical research and corporate headquarters hub, boasting a population of 1.9 million and nearly 255,000 university students, hosting major multinational pharmaceutical and clinical research firms. 

Krakow represents Poland's second life sciences centre, featuring 20 higher education institutions and a regional population of 8 million within 100 km. The city offers 1.7 million sq m of office space, with an additional 125,000 sq m under construction. 

Key corporate presences in Krakow include multinational pharmaceutical R&D partnerships, preclinical contract research organisations with new laboratory headquarters, computational medicine institutes, and bio-pharmaceutical manufacturing entities.

► Polish Real Estate Outlook

Poland’s transition into a developed real estate market is accelerating, driven by robust macroeconomic growth, strong institutional fundamentals, and expanding domestic capital depth. Future momentum will rely less on speculative construction and more on active asset management, high technical standards, and functional repositioning across aging traditional inventory.

Concurrently, institutional capital is pivoting toward strategic growth sectors, notably living platforms, nearshoring-driven logistics, and data infrastructure. Supported by major transport investments, energy transition initiatives, and expanding power grid capacity, Poland is firmly positioned to solidify its role as a premier, future-proof European investment destination.

► Join us at the GRI Polish Forum 2026 to continue these discussions
 

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Sources:
AMRON-SARFiN
BNP Paribas
CBRE
Colliers
Cushman & Wakefield
Fitch Ratings
ING
IO Partners
JLL
Oxford Economics
S&P Dow Jones Indices