Saturday, 15 March 2025
Poland continues to lead the Central and Eastern European (CEE) real estate investment market, with banks in the country viewing real estate financing as a key strategic priority, according to KPMG’s latest Property Lending Barometer 2024 report. The findings highlight Poland’s strong position despite ongoing challenges in European investment activity, driven by improving investor sentiment and a growing demand for commercial real estate.
Polish banks stand out in the region, showing a clear focus on real estate financing. While 60% of surveyed banks across the CEE reported no change in their approach to commercial real estate financing over the past year, 25% increased their interest in the sector. Poland’s performance has been particularly robust, underpinned by cautious but strategic lending decisions.
“Polish banks consider real estate financing a top strategic priority, setting them apart in the region. Improved investor sentiment and strong demand for commercial properties indicate a brighter outlook for Poland,” said Katarzyna Nosal, Partner at KPMG Poland and leader for the construction and real estate sector.
The report forecasts that 2025 will bring a rebound in investment activity, driven by expected interest rate cuts by the European Central Bank (ECB) and the U.S. Federal Reserve. Lower financing costs are anticipated to further stimulate the market.
Compared to previous years, rising financing costs—once a dominant concern—have receded as inflation stabilizes and interest rates across Europe begin to decline. However, banks are now navigating a shifting regulatory landscape, which places a greater emphasis on ESG (Environmental, Social, and Governance) standards.
The report reveals that:
• 75% of banks surveyed have adopted ESG strategies and incorporated sustainability criteria into their credit approval processes.
• Banks are increasingly offering green financing options, such as reduced-margin loans for energy-efficient projects and participation in green bond issuance.
However, a significant gap remains in financing solutions for modernizing older properties. Only 11% of banks currently offer products targeting this need, despite a clear market demand for upgrades to meet sustainability standards.
“Stricter ESG compliance measures are becoming integral to credit policies across the region. In Poland, the Czech Republic, and Hungary, banks are increasingly rejecting financing for projects that fail to meet ESG expectations,” said Monika Dębska-Pastakia, Head of the Real Estate Team at KPMG Poland.
While digital transformation continues to shape other financial sectors, the real estate financing market in the CEE region remains slow to adopt new technologies.
• Only 7% of banks have partially digitized their credit processes, with 8% in the process of doing so.
• Traditional due diligence methods still dominate, with 56% of banks relying on conventional techniques for assessing investment opportunities.
The Property Lending Barometer 2024 report draws on responses from 43 banks across nine CEE countries: Bulgaria, Croatia, the Czech Republic, Poland, Romania, Serbia, Slovakia, Slovenia, and Hungary. Conducted in November 2024, the research combined online surveys with in-depth interviews, providing a comprehensive overview of the real estate financing landscape in the region.
Poland’s leadership in real estate financing is a reflection of its stable market fundamentals, growing investor confidence, and increasing compliance with sustainability requirements. The strategic importance placed on the sector by Polish banks positions the country as a standout market within the CEE region, offering significant opportunities for both domestic and international investors.
With evolving ESG standards, expected interest rate cuts, and rising demand for sustainable real estate projects, Poland is well-positioned to maintain its role as a leader in CEE real estate investment in the years ahead.
Source: KPMG and ISBnews
