Due to the lockdown caused by the outbreak of the COVID-19 pandemic, most companies embraced a remote working model and scaled-down business activity. How did this affect the Polish office market? Cushman & Wakefield presented a summary of H1 2020.

The first half of the “pandemic year” closed with a total value of investment transactions worth €408 million in Romania, around 18% above the first semester of 2019, with office assets accounting nearly 86% of volumes, according to Colliers International’s market report. Still, the outlook is uncertain since several large big-ticket items have either been frozen or fell through. On the opposite pole, the local land market continues to see deals closing and significant interest.

When assessing the first quarter of 2020, analysts of EBI Construction Activity Report Q1 2020 already highlighted the impact of the pandemic on the Hungarian construction industry. Back then, they did it with the help of a forecast based on limited available data, but since then actual data have been released and the impact of the pandemic on the sector can be assessed in detail.

A survey, prepared by Cushman & Wakefield in partnership with FIHR, targeting Romanian hoteliers was launched in April 2020 to understand the impacts the COVID-19 pandemic holds on the commercial lodging industry. The survey asses the ways in which business have been affected while identifying the critical factors to prevail from the crisis. Cushman & Wakefield and FIHR remain committed towards ensuring that the industry receives appropriate support by collecting and analysing available data and appealing to authorities.

The lockdown period and the uncertainty of the economic impact of the coronavirus pandemic pushed some tenants to temporarily withhold their decisions in pending lease negotiations. Gross take-up climbed to 334,800 sqm in H1 2020, representing a 17% decrease on the same period in 2019, with most transactions having been commenced in the pre-pandemic environment. Cushman & Wakefield summarised H1 2020 on the Warsaw office market.

Over the second quarter, Prologis turned in a strong result both globally and in Europe, despite ongoing uncertainty due to the COVID-19 pandemic. The logistics sector remained resilient during the period with robust take-up levels and declining vacancy thanks to tight supply and sustained and growing demand.

Despite the COVID-19 pandemic, the sentiment on the Polish office market appears to be optimistic. Total office stock currently amounts to just over 11.3 million sqm, with Warsaw the undisputed leader, followed by Kraków. During the first six months of the year, tenant activity reached approx. 667,800 sqm, with new contracts accounting for more than half of take-up. Despite limited new supply (275,700 sqm in H1 2020), the vacancy rate increased to 7.9% (+40 bps Q/Q) in Warsaw and 10.2% (+70 bps Q/Q) in regional markets as at the end of Q2. Axi Immo summed up the first half of 2020 on the Polish office market.

The hotel investment market in Poland is still relatively immature. In an average year, the city of Berlin alone receives twice the number of hotel transactions than Poland as a whole. However, Poland has developed a strong track record in other commercial real estate sectors and, as a result, has an even stronger brand for investing. This has laid down the foundations for global capital to enter the hotel sector, and, indeed, there has been an uptick in the number of international hotel investors actively pursuing opportunities in Poland.

The industrial real estate sector remains the least affected commercial real estate sector in Slovakia. In the second quarter, the market recorded solid leasing activity, reaching almost 120,000 sqm of industrial space. Cushman & Wakefield published its Q2 2020 snapshots for Slovakia’s office, retail and industrial sector.

In terms of tenant activity, the major regional markets can speak of a better H1 than a year ago. Despite the expected slowdown, some companies continue to expand their business. JLL summarised the situation on the Polish office market at the end of H1 2020.