Piotr Staniszewski, Partner, Real Estate, Dentons talked to Property Forum about the awareness of the PRS investors in Poland, planned legislative changes and the current financing conditions.

After a period of rapid development in the years 2021-22, the Polish PRS market is experiencing a setback in terms of the number of both new projects and concluded deals. The participants of the investment panel during Property Forum’s Living Investment Forum 2023 conference in Warsaw tried to discover the reason for such a state of affairs.

The Echo-Archicom Group closes the year 2022 with a strong cash position and further reduced the company's net debt. This is the result of selling seven office buildings worth nearly €320 million. In 2022, the Group generated a net profit of PLN 127 million attributable to shareholders of the parent company, which was mainly the outcome of handing over to customers 2,168 apartments for sale and rent built by Echo Investment and Archicom, as well as an increase in the value of office buildings and apartments for rent.

When comparing the end of 2021 to 2022, there has been a significant increase in the supply of PRS units year-on-year in countries across Central and Eastern Europe (CEE), such as Hungary (+301%), Romania (+244%), Poland (+217%) and Bulgaria (+173%), reveals a report by Colliers.

The prolonged conflict in Ukraine (the refugee wave) and the significantly reduced credit scores increase the demand for renting apartments and thus, affect the development of the PRS market in Poland. The institutional rental sector will also grow due to the changing perception of homeownership by young people, who value mobility and do not necessarily need to own a home. According to Eurostat data from 2021, about 30 percent of the population in the European Union live in rented apartments, while in Poland this number amounts to only about 13 percent. Paulina Brzeszkiewicz-Kuczyńska, Research and Data Manager at Avison Young Poland, summarises this sector's current situation. 

The new investment is a continuation of the Resi4Rent Warsaw Woronicza project. It is a 5-story building with 344 subscription apartments.

Prices of new homes in Romania will fall this year due to lower demand as loan conditions have tightened, but more people will be looking to rent instead and this is leading to an increase in prices this year, according to an analysis by JLL Romania. 

Apricot Capital Group has commenced the construction of the 423-unit Taśmowa 5 PRS development in the Mokotów area of Warsaw, The total investment exceeds PLN 270 million and ACG’s investor has provided the full sum in equity. 

The estimated value of transactions in the Polish institutional rental market exceeded €1.8 billion at the end of 2022, most of which were contracts for projects under development (forward contracts), according to the latest DLA Piper and Savills report – PRS market in CEE. Experts expect that high real estate prices and the declining availability of mortgages will generate increased demand for apartment rentals in the coming years, and thus attract new investments to this market segment.

Romanian real estate consultancy Crosspoint Real Estate, the local partner of Savills, is launching a new segment dedicated exclusively to residential leasing through accessing the private rental sector (PRS).