Residential property prices in Germany see mixed trends in Q3 2024

In the third quarter of 2024, residential property prices in Germany, as measured by the house price index, recorded a slight year-on-year decline of 0.7% compared to the same period in 2023. This marks a continuation of the downward trend observed earlier in the year, albeit at a slower pace, as the year-on-year decrease in Q2 2024 was more pronounced at 2.5%.

On a quarter-on-quarter basis, residential property prices edged up by 0.3% in Q3 2024, representing a smaller increase compared to the 1.5% rise seen in the second quarter. This modest growth suggests a cooling momentum in price recovery, indicating a market still in transition.

The decline in year-on-year prices reflects the lingering effects of high interest rates, tighter lending standards, and cautious consumer behavior in the face of economic uncertainty. The earlier more significant drop in Q2 2024 was attributed to subdued demand and elevated inflation rates, which affected affordability and tempered buyer activity.

However, the slight quarter-on-quarter growth indicates signs of stabilization, possibly driven by improving inflation rates and marginally better consumer sentiment. The housing market also benefited from targeted policy measures to support affordability and incentivize homeownership, although their impact remains uneven across regions and property types.

While the overall trend shows slight year-on-year declines, regional disparities are evident. Urban areas, particularly in major cities like Berlin, Munich, and Hamburg, have experienced softer declines or marginal increases due to sustained demand and limited housing supply. In contrast, rural and suburban regions, which saw a surge in popularity during the pandemic, are experiencing more pronounced price adjustments as demand normalizes.

Segment-wise, smaller residential properties, including apartments, have shown relatively stronger price resilience compared to larger detached homes, as they cater to a broader market of buyers.

The German residential property market remains in a state of flux as it adjusts to broader economic challenges, including elevated financing costs and a cooling economy. While the slower rate of decline and slight quarter-on-quarter increase offer a glimmer of hope, the market is expected to remain subdued in the near term.

Analysts predict that any significant recovery will depend on macroeconomic factors such as central bank interest rate policies, consumer confidence, and government interventions in the housing sector. For now, the market continues to navigate a complex mix of pressures and opportunities.

Source: destatis.de

German economy faces year-end stagnation despite modest December improvement

The German Institute for Economic Research (DIW Berlin) reported a slight uptick in its economic barometer, which rose to 86.4 points in December, a 2.7-point increase from November. However, the index remains well below the neutral 100-point mark, indicating below-average growth. This suggests the German economy is ending 2024 on a weak note despite minor signs of recovery. Economic output in the fourth quarter is expected to have declined slightly, with domestic demand faltering and exports failing to provide momentum. Political and economic uncertainties, both domestic and international, continue to weigh heavily on sentiment.

Germany’s internal challenges include the ongoing political vacuum following the collapse of the Ampel coalition, with a new government unlikely to form before spring. Internationally, the re-election of Donald Trump as U.S. President adds to the uncertainty, particularly regarding trade policy.

“Trump’s return raises significant questions about U.S. economic and foreign policy directions,” said DIW’s head of economic research, Geraldine Dany-Knedlik. “Tariff increases on certain EU imports are a real risk. However, the European Central Bank’s interest rate cuts may provide some relief to the German economy in the coming year, alongside a slight recovery in the eurozone.”

German industry remains a key point of concern. Industrial production declined again at the start of the quarter, and the business climate has further deteriorated. Companies are increasingly pessimistic about both current conditions and future prospects.

While order books saw a minor boost—largely thanks to a major shipbuilding contract—sectors like mechanical engineering and automotive manufacturing reported declines in backlog orders. “Domestic demand continues to be weak,” noted DIW economist Laura Pagenhardt. “Companies remain cautious, holding off on significant decisions until the economic policy landscape becomes clearer next year.”

The services sector shows early signs of improvement, with the Purchasing Managers’ Index for services rising in December. However, consumer sentiment remains muted despite a significant drop in inflation. This is partly due to challenges in the labor market, particularly job losses in manufacturing, which are dampening private consumption. Unemployment, while still low, reflects the broader economic weakness.

“Germany is currently experiencing both economic and political paralysis,” said DIW economic expert Guido Baldi. “The hope is that in 2025, Germany can address these blockades and capitalize on its numerous strengths.”

The coming year will be crucial for Germany to resolve its domestic challenges and navigate global uncertainties, particularly in trade and industrial policy. While signs of stabilization exist, the path to sustained recovery will require decisive action from both policymakers and industry leaders.

Source: DIW Berlin

Polish housing loan value drops 31.9% YoY to PLN 6.73 billion in November

The value of residential loans in Poland fell by 31.9% year-on-year (YoY) to PLN 6.727 billion in November 2024, representing a 9.5% month-on-month (MoM) decrease, according to data from the Credit Information Bureau (BIK). The volume of housing loans granted also declined sharply, with 15,700 loans issued last month, a drop of 35.7% YoY and 10.5% MoM.

Despite the November decline, housing loans for the January-November period showed strong growth. The number of loans granted rose by 31.9% YoY to 192,600, while their total value surged by 45.8% YoY to PLN 80.72 billion.

“Even without a new support program, housing loans are performing well. November’s lending value of PLN 6.72 billion remains at a solid level. The projected annual loan volume of PLN 81 billion is likely to be exceeded, as we’ve already reached PLN 80.72 billion after 11 months,” said Waldemar Rogowski, Chief Analyst at BIK Group.

However, Rogowski noted that this year’s figures include loans from applications submitted in 2023 under the ‘Safe 2% Loan’ program, amounting to PLN 13.6 billion. Without these contributions, the January-November lending total would be PLN 67.12 billion, representing a more modest 21.2% YoY increase.

The increasing value of housing loans, despite fewer loans being issued, indicates that borrowers are taking on higher loan amounts. This trend reflects rising property prices in Poland, Rogowski pointed out.

“The main driver of the January-November credit growth is improved creditworthiness, allowing borrowers to take out higher loans. This trend aligns with the relatively high housing loan levels in the EU and longer loan repayment periods. It also indicates that higher-income individuals are dominating the market,” Rogowski explained.

In November 2024, the average housing loan reached a record PLN 429,200, marking a 6% increase YoY. This figure is the highest recorded in Poland’s history, emphasizing the impact of escalating property prices on the housing loan market.

While the November slowdown highlights fluctuations in the housing loan market, strong year-to-date figures suggest robust demand driven by improved creditworthiness and the enduring appeal of real estate investment in Poland.

Source: BIK and ISBnews

INVESTIKA Real Estate Fund acquires five logistics parks in Poland in landmark €150M deal

INVESTIKA Real Estate Fund has acquired a portfolio of five logistics parks in Poland from developer 7R. The transaction, completed in partnership with BUD Holdings SA, is valued at over €150 million, making it the largest logistics property investment in Poland this year and the second largest in Central Europe in 2024.

The newly acquired 212,500 sqm portfolio includes high-quality logistics properties across Poland, nearly fully leased to tenants from the production, logistics, retail, and e-commerce sectors. The properties are:
• 7R Park Bydgoszcz I – North-west Poland
• 7R City Park Gdańsk Airport I – Northern Poland
• 7R City Flex Kraków Airport I – Southern Poland
• 7R Park Kielce – Southern Poland
• 7R City Park Poznań West – Western Poland

This acquisition increases INVESTIKA’s Polish real estate holdings to over 409,000 sqm, underscoring its growing presence in one of Central and Eastern Europe’s largest and most dynamic property markets. Bank financing was provided by Berlin Hyp.

“This acquisition strengthens our position in the largest and most robust market in Central and Eastern Europe,” said Petr Čížek, Chairman of the Board of Directors at INVESTIKA. “The portfolio features high-quality logistics properties leased to well-known tenants, supporting our long-term target return of 4–6% annually for investors. Alongside our office building investments, we are strategically focusing on logistics, a sector we believe will see significant future growth.”

Paolo Panico, Director of BUD Holdings SA, added, “This portfolio from 7R represents a rare opportunity to invest in high-quality, stabilized logistics assets that align perfectly with our investment strategy.”

The logistics parks are strategically located, offering flexible layouts to meet tenant needs. All properties comply with international BREEAM environmental certifications, and selected buildings feature photovoltaic panels. INVESTIKA plans to implement long-term active asset and property management strategies to enhance the value of these assets for investors.

Rafał Proczek, Director of INVESTIKA Polska Services, highlighted the strategic importance of the acquisition: “These assets guarantee stable rental income from a diverse group of reputable tenants. We have prepared long-term management plans to maximize their potential and ensure sustained value growth.”

INVESTIKA Real Estate Fund and BUD Holdings were advised by a consortium of experts, including Linklaters, Colliers, Avison Young, REALS, and CRIDO. Developer 7R was advised by A&O Shearman.

Chris Zeuner, Co-CEO of 7R, commented: “This transaction reflects the exceptional quality of our logistics properties, offering investors a rare opportunity to acquire a sizable and stabilized portfolio. The long-term stability of rental income underscores the value of these assets.”

With this acquisition, INVESTIKA continues to solidify its position as a leading player in the Central European real estate market, balancing growth across sectors while delivering robust returns for its investors.

BGK provides over PLN 1 billion for green urban transformation projects

Bank Gospodarstwa Krajowego (BGK) has successfully concluded 201 loan agreements, granting over PLN 1 billion in financing to support the green transformation of Polish cities. This milestone meets the 2024 targets set by the National Reconstruction and Resilience Plan (KPO) within the prescribed timeline, the bank announced.

Since April, when BGK signed an agreement with the Ministry of Funds and Regional Policy, the bank has introduced targeted loans to its portfolio. These funds have primarily supported local governments, resulting in the creation or revitalization of over 90 hectares of green spaces, a reduction of more than 120 GWh in primary energy consumption, and the planting of nearly 1 million new plants.

“This is the largest project for local governments under the KPO, with a funding pool of PLN 40 billion,” said Minister of Funds and Regional Policy Katarzyna Pełczyńska-Nałęcz. “The initiative aims to enhance the quality of life in urban areas. Applications amounting to nearly PLN 4.3 billion have already been submitted, encompassing 173 projects in small cities, 417 in medium-sized cities, and 388 in large urban centers.”

Marta Postuła, BGK’s First Vice-President, emphasized the dual benefits of the initiative: “These investments are not just about fulfilling KPO objectives; they directly enhance the quality of life for residents by reducing pollution and increasing urban greenery. Additionally, they stimulate economic growth, particularly in smaller towns, which account for the majority of signed contracts. This aligns with BGK’s mission of fostering sustainable socio-economic development in Poland.”

The loans have primarily supported projects involving water and sewage infrastructure, energy-efficient lighting, and the greening of urban areas. Small and medium-sized cities have been the main beneficiaries, accounting for over 60% of the loans issued. Larger cities, while applying less frequently, secured higher amounts, with Warsaw leading as the record holder, signing contracts worth over PLN 400 million.

Loan agreements under this initiative can be finalized until the end of August 2026. However, BGK’s strong collaboration with local governments is expected to ensure the full allocation of funds well before the deadline.

BGK highlighted the favorable terms of the loans, with interest rates ranging from 0% to 1%. For non-revenue-generating projects, up to 5% of the principal can be forgiven, making the financing highly advantageous for municipalities.

As Poland’s state development bank, BGK plays a pivotal role in driving economic growth and sustainability. It collaborates with development institutions such as PFR, KUKE, PAIH, PARP, and ARP, financing major infrastructure projects, enhancing housing access, and supporting Polish businesses domestically and abroad.

With this green urban transformation initiative, BGK continues to contribute to Poland’s transition toward sustainable urban living and long-term economic resilience.

Source: Bank Gospodarstwa Krajowego and ISBnews

Poland: 50% of bankers anticipate growth in housing loans within six months

The percentage of bankers expecting an increase in housing loans for individual customers over the next six months rose to 50% in December, up from 46% in November, according to the latest “Monitor Bankowy” report published by Mind&Roses. Expectations for growth in investment loans for enterprises also climbed significantly, reaching 55% in December compared to 41% the previous month.

The survey found that 53% of respondents anticipate an increase in consumer loans for individuals in the next six months, a slight uptick from 52% in November.

“The overall customer activity index in the household credit market rose by 20 points in December, reaching 29 points. The balance of customer activity assessments for consumer credit increased by 6 points month-over-month (m/m) but dropped 3 points year-over-year (y/y). Meanwhile, the housing loan market assessment balance improved by 43 points m/m, though it remains 4 points lower y/y. The three-month forecast index for the household loan market edged up by 1 point, now standing at 41 points,” the report stated.

The corporate loan market also showed positive momentum. Growth in trade loans is now expected by 68% of bankers, up from 59% in November, while expectations for investment loan growth jumped to 55% from 41% over the same period.

“The overall activity indicator for entrepreneurs in the business loan market rose by 17 points to 19 points. For the investment loan market, the monthly activity index increased by 16 percentage points and is 21 points higher y/y. Similarly, the trading loan market index grew by 20 points m/m and 4 points y/y. The forecast index for the business operators’ loan market is up by 4 points, currently at 26 points,” the report noted.

The findings reflect increasing optimism among bankers about both household and business lending markets. The housing and consumer credit segments are experiencing steady growth, while investment and trade loan expectations indicate renewed confidence in corporate borrowing. These trends suggest a broader recovery in lending activity as the economy continues to stabilize and grow.

Source: Mind&Roses and ISBnews

7R to develop 230,000 m² cutting-edge logistics hub in Kraków’s Nowa Huta District

7R has announced its investment in the Logistics and Industrial Center “Ruszcza” in Kraków’s Nowa Huta district. The project, part of the larger “Kraków – Nowa Huta Przyszłości” initiative, aims to revitalize the district’s post-industrial landscape and align with the city’s strategic development goals.

The centerpiece of this investment, the 7R Hub, will offer 230,000 m² of low-emission, high-standard technology and production space, built to the company’s advanced 7R Green Saver standards. These standards emphasize sustainability, achieving significant reductions in CO2 emissions and energy demand.

“Kraków is where 7R began, and we are proud to contribute to the city’s ongoing development,” said Magdalena Kostjan, Head of Leasing at 7R. “The 7R Hub is a unique investment that leverages all our expertise to create opportunities for Kraków’s businesses and the logistics and industrial markets. We envision this project attracting innovative companies and investors while creating thousands of new jobs to support Kraków’s evolution into a modern and business-friendly city.”

Situated near the “Igołomska” and “Bieżanów” junctions, the hub is just 13 kilometers from Kraków’s Main Square. Its location ensures easy access to revitalized railway facilities, the A4 motorway (connecting Ukraine to Germany), and the S7 expressway (linking Kraków to Warsaw, Gdańsk, and southern Poland). Convenient public transport and regional rail connections will make the hub accessible for employees.

The 7R Hub will adhere to the highest sustainability standards, targeting BREEAM Outstanding certification. Key features include high-efficiency air-source heat pumps, photovoltaic systems with energy storage, and advanced lighting controls. These innovations promise at least a 50% reduction in operational CO2 emissions and primary energy demand compared to Polish technical standards.

The project also incorporates a comprehensive land revitalization plan. More than 1,500 new trees will be planted, including biocenotic species to enhance habitat diversity. Natural land depressions will be transformed into rain gardens, which will manage stormwater runoff, improve soil quality, and support local ecosystems.

“Rain gardens are vital for urban ecology. They retain excess rainwater, replenish local water resources, and support biodiversity by creating natural habitats for plants, insects, and small animals,” explained Marek Mazur, Development Director at 7R. These measures aim to enhance the microclimate and foster sustainable urban development.

Adjacent to the hub, 7R will create 7Relax, a green space designed for employee recreation. The area will feature artistic landscaping developed by a student from the Warsaw Academy of Fine Arts, recognized in 7R’s “Warehouse of Art: Young Art for the Planet” competition. The company also plans to implement various community initiatives in line with its sustainability goals.

The “Kraków – Nowa Huta Przyszłości” project, spearheaded by Kraków’s Municipality and the Małopolska Region, seeks to transform the Nowa Huta area into a modern urban district while preserving its industrial heritage. The 7R Hub is a key component of this vision, contributing to the economic and ecological revitalization of the region.

7R’s investment not only redefines the logistics and industrial landscape but also sets a benchmark for sustainable development and community integration in Kraków and beyond.

Retail parks set to dominate commercial expansion in 2025

The retail real estate sector in Poland continues to grow, with retail parks playing a dominant role. In 2024, a total of 337,100 m² of new commercial space was completed, encompassing 37 projects, including 35 retail parks and 12 expansions, according to Mariusz Majkowski, Director in the Sales Area Department at CBRE. This trend is expected to strengthen in 2025, with retail parks capturing a larger share of the market.

“Retail parks have been the focus of market expansion in recent years, and this trend will persist in 2025. Of the 588,100 m² of space currently under construction, more than half is dedicated to retail parks. Investors are increasingly targeting smaller markets to meet consumer demand for convenience—offering shopping closer to home and combining brick-and-mortar with online channels,” said Majkowski.

At the end of Q3 2024, Poland’s retail space totaled 14.42 million m². Shopping centers accounted for nearly 75%, retail parks for 25%, and outlets for the remaining 2%. Retail parks are expected to expand their market share as new developments increasingly focus on smaller towns, where 63% of ongoing projects are located. Of these, 69% are retail parks, reflecting their growing popularity among investors and consumers.

“Retail parks are now appearing in increasingly smaller towns, with diverse formats ranging from compact facilities combining grocery stores and drugstores to large parks offering extensive shopping options,” noted Majkowski.

Both foreign and domestic investors are fueling this growth. International capital from countries like the Czech Republic, Hungary, Israel, and South Africa has been active in the Polish market, but domestic investors are also increasing their participation. Majkowski expressed optimism about the rising role of Polish investors, not only in the local market but across the Central and Eastern European (CEE) region.

Several new brands entered the Polish market in 2024, including Dreame (China), Jack & Jones (Denmark), Made by Society and Luca (Romania), Kamalion (Spain), Arket (Sweden), TAG Heuer (Switzerland), Rebernia (Ukraine), and GAP (USA). Polish brands such as Tatuum, Half Price, and LPP are also expanding their footprint in the CEE region.

While retail park development thrives, shopping malls remain active, particularly through renovation and rebranding. Older malls, built in the 1990s, are being updated to meet current customer preferences, with boutique malls transitioning into convenience-focused centers by attracting tenants like Action and Tedi. Meanwhile, some aging malls, such as Arkady Wrocławskie and Malta, are being demolished to make way for residential or mixed-use developments.

“Thoughtful changes can give existing shopping centers a second life, allowing them to stay competitive and relevant in a rapidly evolving retail landscape,” Majkowski concluded.

Source: CBRE and ISBnews
Photo: Vendo Park, Szczecin by TREI Real Estate

Żabka opens 11,000th store, plans to continue expanding with over 1,000 new locations annually

Żabka Polska has reached a new milestone by opening its 11,000th store in Poland, located at Moliera 8 in Warsaw, near the Grand Theatre. The company reaffirmed its commitment to maintaining an ambitious expansion rate of more than 1,000 new stores annually.

“The opening of our 11,000th store is a significant moment in Żabka’s history, marking over two decades of supporting entrepreneurship and creating opportunities for local businesses,” said Adam Manikowski, Vice-President and Managing Director of Żabka Polska. “Żabka is more than a retail chain—it’s a network that invests in people, communities, and the Polish economy. With over 9,000 entrepreneurs and 63,000 jobs created through partnerships with franchisees, our stores are a testament to combining business success with a positive environmental impact.”

Żabka’s scale of operations enables it to expand its product offerings and implement innovative solutions, boosting turnover for franchisees. Its business model, which combines low entry barriers with robust operational and technological support, has attracted over 9,000 entrepreneurs, including nearly 900 in Warsaw.

The Żabka Group also operates Żabka Nano, a chain of autonomous, cashierless stores, complementing its traditional franchise-based convenience store network. Additionally, the company offers a growing portfolio of digital services, further enhancing its ecosystem.

Żabka debuted on the Warsaw Stock Exchange in October 2024 and is part of the mWIG40 index. As Poland’s leading convenience store chain, Żabka continues to strengthen its position in the market while driving local economic growth and innovation.

Source: Żabka Polska and ISBnews

DPD Polska closes 2024 with 9,000 parcel machines, plans 3,000 more in 2025

DPD Polska has expanded its DPD Pickup network to include 9,000 parcel machines, with plans to add another 3,000 machines in 2025, the company announced.

“Reaching the milestone of 9,000 parcel machines marks a significant achievement in developing modern logistics infrastructure. This expansion allows us to meet the evolving demands of e-commerce customers and manage growing parcel volumes, particularly during peak periods,” said Łukasz Zembowicz, Sales and Marketing Director at DPD Polska. “Parcel machines are a solution aligned with modern consumer trends, offering convenience, flexibility, and personalized options. The increasing popularity of our DPD Pickup network reinforces our commitment to its consistent development. Adding 3,000 more machines next year will further enhance our ability to serve our customers effectively.”

The DPD Pickup network now spans over 1,000 towns and cities across Poland, with the highest concentrations in Warsaw and Kraków. Warsaw leads the list with over 640 parcel machines, followed by Łódź with nearly 320, Kraków with over 310, Wrocław with close to 270, and Bydgoszcz with over 190.

DPD Polska is part of DPDgroup, one of Europe’s largest international courier networks. The company’s continued investment in parcel infrastructure reflects its dedication to staying ahead in the dynamic e-commerce landscape and catering to the rising demand for efficient, customer-friendly delivery solutions.

Source: DPD Polska and ISBnews

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