The Private Rented Sector (PRS) market in Poland has experienced a decade of growth. However, the institutional rental sector is still in its early stages, with the first transaction completed in 2014. The state-owned Fundusz Mieszkań na Wynajem was a pioneer in the market, acquiring the first residential building in Poznań and commencing operations in 2015. Analysts from Avison Young sum up the current situation in the PRS market in Poland.
New investors gradually entered the Polish market, but a significant breakthrough occurred after 2019, as more private companies began announcing and executing PRS projects. By December 2024, institutional investors owned 20,000 units, with an additional 9,500 apartments under construction. Thus, we are witnessing the huge development dynamic of this sector, which grew by 5 times within the past 5 years. Forecasts for the coming years indicate a stable development of PRS in Poland.
By the end of 2024, 37% of existing PRS units in Poland were clustered in Warsaw. The remaining units were located in the major Polish cities, what confirms the growing rental trend also outside the capital city. Moreover, regional markets are also the biggest construction sites in Poland, being responsible for 65% of a number of newly constructed PRS units in Poland. Lately, also smaller cities have become visible on the Polish PRS map, namely Lublin and Elbląg, where Fundusz Mieszkań na Wynajem is the pioneer.
Currently, the biggest share of already existing PRS units in total city housing stock is to be found, interestingly, in Wrocław (1.0%) and further in Warsaw (0.7%) and Poznań (0.7%). Nevertheless, except for Wrocław, the ratio is still considerably below 1%, thus the presence of institutional rental housing is rather marginal, compared to e.g. Berlin with over 30% share of PRS flats in the total housing stock.
Throughout 2024, 28 new PRS projects were completed, contributing over 5,900 units to the market, 16 of which were located in regional cities. The majority of new developments were introduced by already established PRS operators, with only 1 project delivered by the new market player, AP Słowackiego.
Collectively, the 3 largest players - Resi4Rent, Vantage Rent, and Fundusz Mieszkań na Wynajem – currently own over 50% of the existing PRS stock. The pipeline for 2025 includes the addition of another 6,500 units to the market, of which 70% is expected to be delivered on regional markets.
“For several years now, Avison Young has been actively involved not only in monitoring the construction of multiple PRS buildings but also in carrying out additional upgrades. Most recently, this included the installation of photovoltaic roof systems on 13 properties within Heimstaden’s portfolio in Warsaw and Krakow. Having worked closely with these properties at various stages of their lifecycle, we can confidently confirm the strong demand for PRS apartments. Their key advantages - such as modern construction, high-quality fittings, and flexible lease agreements - continue to attract tenants for both short- and long-term stays", said Tomasz Daniecki, Director, Head of Technical Advisory
Until recently, the target group for flats in the PRS formula has been young professionals aged 25–35, including foreigners relocating to Poland. However, rising inflation and mortgage rates have expanded this group. Institutional rental is therefore the answer for both those with difficult access to finance and those who do not want to buy a flat on their own. A shift in attitude towards homeownership is also evident. While around 30% of Europeans rent flats, the figure in Poland is just 13% (Eurostat). However, this structure is already changing due to rising mortgage costs, inflation, and an influx of refugees. Nevertheless, in Poland, the average length of the lease agreement is 1 year, while in Western Europe it often exceeds 10 years.
Demand and rents
The dynamic development of investments offering institutional rental units and the great interest of investors in this type of project is a response to the growing demand from potential clients. The interest in renting flats has been growing due to the increase in interest rates, which significantly limited the creditworthiness of apartment buyers with bank support, the influx of Ukrainian refugees, as well as the increase of prices of apartments as a result of the government programme “Bezpieczny Kredyt 2%” (concluded in January 2024).
The strong demand for renting flats in the PRS formula is also reflected in exceptionally high occupancy rates. Among the major PRS operators on the Polish market, the average vacancy rate at the end of 2024 stood at approx. 2.0%.
Rental rents depend on the size of the unit and its attractiveness - location in the building, floor, orientation and additional amenities such as balcony, loggia, terrace or garden. Such simplification of rates is enabled by build-to-rent formula. At the end of 2024, Warsaw had the highest rental rates (ca. PLN 106/sqm) for apartments in the PRS formula in Poland. Right after Warsaw was the Tricity with an average price per sqm equal to approx. PLN 93/sqm. In Wrocław, the average price per sqm was approx. PLN 89/sqm, similar to Kraków, where it reached PLN 88/sqm. The lowest price per sqm was observed in Łódź and reached about PLN 69/sqm. The analysed prices include service charges, without media costs.
Major players
Real estate investment funds usually purchase entire apartment buildings and even housing estates, which are then put up for institutional rent. With the development of the PRS sector in Poland, changes in the cooperation model are also observed. Projects developed in built-to-rent formula, where residential properties are built from the beginning for rent purposes, have gained popularity. Such a formula allows to standardize later rental rates.
Currently, over 50% of the existing PRS stock belongs to the 3 major operators. Resi4Rent platform is the undisputed leader in terms of completed PRS units, followed by Vantage Rent and the state-owned fund Fundusz Mieszkań na Wynajem. Altogether, they accommodate over 10,850 units in the PRS formula. As far as new developments are concerned, Resi4Rent also leads the market, accounting for over one-third of newly built flats, followed by Life Spot platform (19%) and Fundusz Mieszkań na Wynajem (18%).
PRS investment market in Poland
“We are seeing increasing interest from investors looking to purchase older office buildings with the potential for conversion into student housing, residential, or PRS units. One of the key advantages of these properties is their prime city-centre locations. Additionally, repurposing existing buildings can often be significantly more cost-effective and time-efficient than developing new ones from the ground up. Avison Young’s technical consultants have already conducted multiple analyses of office buildings for potential residential conversions. Encouragingly, our findings suggest that adapting office spaces for residential use - without demolition - is quite feasible under current technical regulations. In fact, it is notably easier to convert office buildings into residential units than the other way around”, said Patryk Błach, Senior Consultant, Investment
In 2024, the residential market in Poland saw a total of 12 closed transactions in the PRS sector, achieving a record-breaking result of €344 million. The PRS deals were primarily finalised by already active market operators, with the exception of one new buyer, namely Lew Invest, who acquired the Urban Home project from G City in Kraków. Notably, Sweden-based investors were responsible for 50% of the total PRS investment volume. Warsaw remained the leading PRS investment market, with 9 transactions completed. Notably, 2024 also featured a portfolio transaction brokered by Avison Young, namely City Living’s package of apartments located in Warsaw, Poznań, and Bydgoszcz.
Over the past decade of PRS operations in Poland, the total investment volume of closed transactions exceeded €860 million. 2022 saw a sharp increase, driven by the emergence of the secondary investment market for operational assets, initiated by Catella’s withdrawal from the Polish market.
Case study - master plans
Due to the increasing scarcity of residential land in large cities, investors are more often opting to build PRS facilities on attractively located plots with commercial use. By the end of 2024, the number of PRS formula investments in Poland included 140 projects, of which 80% were completed and the remaining 20% are under construction. Nearly ¾ of the analysed investments are located in areas covered by binding local master plan (MP).
The majority of investors choose to locate properties for institutional rental in areas which are designated in the local master plan for residential and commercial development (MW/U). So far, 44 investments have been or are being constructed on plots with this designation, which accounts for 45% of all projects located in areas covered by the local master plan.
Due to the scarce availability of land in the largest Polish cities earmarked exclusively for multifamily residential development (MW), such projects constitute a definite minority (less than 20%) in the overall structure of the analysed investments. The situation is slightly different in the areas designated in the local master plan for commercial development (U), where almost 40% of PRS investments are currently located.
The portfolios of the leading players in the PRS sector in Poland are dominated by projects located in areas designated for residential and commercial or solely residential development. However, the largest of them locates nearly ¾ of its investments in areas designated for commercial development, which gives him an advantage not only in this aspect but also in general - this investor boasts the largest market share (17%) in terms of the number of existing projects and those under construction.
Structural differences in the share of a given local master plan designation on which PRS projects are located can be seen in the analysis of individual cities. Poznań and Wrocław exhibit the highest, ca. 20%, share of projects on plans with residential designation. The Tricity is characterised by the largest, 45% share of PRS projects located on a plan with commercial designation, while in Warsaw, Łódź and Kraków approx. 25% of PRS projects are located in the area for which MP is in progress. Interestingly, in Poznań, 35% of investments are located in areas not covered by MP. This is due to the fact that in the central part of the city still many areas do not have a local master plan.
As the amount of residential land is decreasing, investors are more often opting to build PRS facilities on commercial-designated plots whose location is attractive for housing. The purchase prices of commercial designated plots are usually lower than those of the ones with residential zoning, which makes them an interesting alternative for PRS investors. In addition, they do not have to compete with typical residential developers when acquiring such a plot. However, a PRS investment on a commercial site, despite cheaper land, once the facility is developed and commercialised, involves a VAT charge on rental income, which affects the initial yield.
