CEE Summit: optimism on the rise as foreign investors return

Poland and CEE are in a ‘different world’ compared to Western Europe as there is more optimism about the prospects of real estate, delegates heard at the 10th annual CEE Summit, organised by Real Asset Media and The Poland Observer, which is taking place in Warsaw.

“The level of optimism on the Polish market suggests that there is a steady path of growth over the short term” said Tim Wilkinson, European acquisitions at Indotek, adding “although I believe the long term outlook is strong, the short term risks remain closely linked and influenced by the challenges that the more mature markets of Western Europe face”

The flip side is that pessimism in the West has led to rapid repricing, especially in London, where the market can bounce back very quickly, but there has been no such repricing in CEE, Wilkinson added, with the exception of Poland.

“Poland is leading the way in repricing, just as it is leading the way in the profile of capital coming here, as there are major American, Asian and European investors,” Wilkinson said.

Last year there was a sharp fall in transactions in the Polish market, but 2024 is seeing a change in attitudes and a return of foreign capital. 

“In the last two months we’ve seen an increase in interest from investors and a huge inflow of enquiries,” said Justina Kedzierska-Klukowska, head of Warsaw office, Berlin Hyp. “They may not all become transactions, but it’s a concrete and positive sign of activity returning to the market.”

The differences of opinion and outlook are particularly striking when it comes to the office sector.

“In London and Western Europe there is a really negative attitude to offices, but here in Poland we are in a different world,” said Karczewicz. “The office market is back and investors see the opportunities in high-quality offices. People underestimate the change that has been happening here, and that is why you need a local team on the ground. It cannot be done from London.”

There are cross-border CEE investors looking at Poland but also Scandinavian and Baltic capital as well as French REITS, he said, “but the Germans are still missing.”

“We are also big believers in the office sector,” said Kedzierska-Klukowska. “There was a fear of oversupply a few years ago, but now the market is in a good place. Warsaw will keep growing and developing. I don’t see any other scenario.”