In the first quarter of 2025, Poland’s retail leasing market stabilized and the retail sector saw a notable rebound in investment transactions, with the best first-quarter performance in three years. According to Cushman & Wakefield, growing investor appetite is leading to a gradual improvement in financing availability, signalling a further increase in investment market activity.
Investors flock to retail parks
According to Cushman & Wakefield’s Marketbeat report, retail investment in Poland totalled EUR 190 million in the first quarter of 2025, the best first-quarter performance since 2022.
"While 2024 was a year of big-ticket shopping centre transactions, early 2025 was dominated by retail park investment deals and sales of smaller shopping malls. Retail park acquisitions were finalised in the first quarter by LCP, Terg, and Redkom Development. Additionally, six local shopping centres changed hands – these included three Plaza Centres in Upper Silesia, acquired by Ukrainian-based Focus Estate Fund, Pasaż Świętokrzyski in Kielce, Galeria Świdnicka in Świdnica, and Galeria Młyńska in Racibórz", comments Aleksandra Włodarczyk, Associate, Capital Markets, Cushman & Wakefield.
Poland follows a broader European trend of investment recovery, as evidenced by a growing number of transactions and increased demand from investment funds, including for shopping centres.
"Following a very active 2024, which saw retail investment across Poland surpass EUR 1.6 billion – the highest level since 2019 – the positive trend is continuing this year. Given current investor sentiment and pending transactions in the pipeline, this year’s investment volume is likely to match 2024’s record high", says Aleksandra Włodarczyk.
Banks gradually resume lending for retail assets
The retail market is undergoing a gradual transformation, with retail assets – particularly retail park portfolios – attracting growing investor interest over the past two years. Banks’ willingness to provide lending mirrors investor appetite, as financial institutions place strong emphasis on the ability to exit from investments, which is assessed based on current and projected demand for specific property types.
"After several years of stagnation in retail property financing - caused by both COVID-19 and high communal area maintenance costs affecting net operating income and investor activity - we are seeing green shoots of recovery. Some banks have begun to selectively offer financing for the acquisition of retail parks and dominant shopping centres", explains Mira Kantor-Pikus, Partner, Equity, Debt & Alternative Investments, Capital Markets, Cushman & Wakefield.
The loan-to-value (LTV) ratio is typically approximately 50%, with loan conditions, including margins, strictly dependent on such factors as the quality of a building, occupancy levels and the weighted average unexpired lease term (WAULT). The loan period is usually slightly shorter than the WAULT. According to Cushman & Wakefield, average loan margins range between 2.25% and 2.75% per annum. The front-end fee is approximately 1% of the loan amount. The base rate is typically either 1M or 3M EURIBOR, with around 70% of the loan often hedged through IRS or options.
Financing is easier to secure with strong ESG credentials
Key factors considered by banks when assessing individual projects include energy efficiency, ESG strategies and planned decarbonisation pathways, particularly for older buildings. It is worth noting that - according to Cushman & Wakefield’s data - as much as 71% of Poland’s retail stock is over 10 years old.
"Banks tend to align their offerings with investor interest – the current demand for retail parks is particularly favourable for investors seeking bank financing for new projects or ESG-driven refurbishments. Investment funds and other entities looking to deploy capital are naturally targeting value-add assets, with opportunities lying in energy-saving solutions that meet increasingly strict environmental and health standards", concludes Mira Kantor-Pikus.
