The BPCC’s Real Estate & Construction working group meeting for Q1 2025 was held on 4 March at the offices of DZP in Warsaw. The meeting’s format is popular among members from the sector, offering participants a unique cross-section real-time view of market sentiment from investors, developers, contractors, engineers, building-material producers and real estate agents, representing supply- and demand sides.
After a welcome and introduction from the host, Tomasz Darowski, partner and head of Infrastructure and Energy Practice, DZP, participants introduced themselves and their companies. Mr Darowski outlined the current state of the Polish infrastructure market, pointing out that Poland intends to spend 20 billion złotys on roads, 30 billion złotys on railways, and 15 billion złoty on energy projects. On top of this, there will be large sums of money spent on data centres as well as on military infrastructure. He pointed to the challenges facing the construction sector, such as rising materials prices, the long waits for permits, lack of workers, and insufficient guarantees to secure the realisation of investment projects. But above all, geopolitical uncertainty – in particular what will happen in Ukraine – is the decisive factor – a ceasefire will help the market. Foreign investors are still cautious about investing in Central Europe; from a distance Poland looks too close to the frontline and this freezes investment decisions.
Participants then introduced themselves and their companies, after which the round-table discussion began. As always, this meeting was held under the Chatham House rule to encourage open sharing of insights.
The wide-ranging discussion began with a look at Poland’s office market. Key trends are the ongoing return to the office, with a shift from three to four days in the office being most common (from 3:2 to 4:1), and the continued migration of tenants to smaller spaces in high-quality modern buildings in city-centre locations. Here, growing demand for prestigious offices is noted, with vacancy rate for these being significantly lower than for older buildings. Modernisation of older buildings, so they can be certified for ESG purposes, is another trend. Repurposing offices for residential and mixed-use is being observed, particularly in areas outside the central business district. In infrastructure, whilst there’s money on the table, poor cooperation between the public authorities and the construction sector is hampering progress. The high cost of borrowing is hitting over-leveraged developers, whilst those who are self-financed are doing better.
Data centres are showing promise with growth driven by rising demand generated by AI, but questions remain about supplying them with clean energy and dealing with the waste heat (again, public-private cooperation is suboptimal). The expected investment boom in defence and military infrastructure is tempered by the long waits for concessions. Public procurement in Poland is complex and does not favour newcomers from outside the EU.
There was a discussion about PropTech and building management systems (BMSs), the rapid obsolescence of existing BMSs and the need to install new ones based on the Internet of Things (IoT) technology that doesn’t silo data. Also discussed were the prospects of the government passing legislation allowing for the creation of real-estate investment trusts (REITs), the buy-to-let and build-to-let rental sectors, and supply and demand in the Polish housing market.
Whilst investors from the US and more distant markets are waiting to see how the situation in Ukraine will play out, funds from the Scandinavia, the Nordics, Baltics and other CEE countries are actively making the most of current investment opportunities in Poland, given their superior understanding of local realities. Notable here are private-office investment funds from Poland’s neighbours entering the Polish real-estate market.
There was a presentation of CAS Platforma – an online resource for the construction sector that models the prices of building materials, labour and other input costs up to 2027 for use in calculating the likely probabilities of the effect of inflation on budgets. The platform can be used for all kinds of projects from housebuilding to rail infrastructure and is based on a solid database of past and current prices across the sector.
The BPCC would like to thank DZP for kindly hosting the meeting. The next Real Estate & Construction Round Table will take place in May in Warsaw.
