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Colliers summarises the situation on the commercial investment land market

In 2011, an increase in the number of transactions in the land for investment trade was observed, the total value of which exceeded PLN 1 billion. It is a good result, taking into account that the market is still recovering after the crisis from 2008; however, the analysis of data from 2006-2007 shows that a similar value of transactions was registered in individual markets in Warsaw, Cracow or Wroclaw.

Despite a high supply, the demand for land for investments was not fully satisfied, mostly due to the lack of properties which would meet the requirements of developers. Unfavourable location or the shape of a plot, which would prevent effective development of the property, are the main reasons of some plots of land being not traded in the market, yet the largest share were the plots with their price inadequate to the investment opportunities they offered.

In 2012, activeness of entities in the investment land market should remain at a stable level, which so far has been confirmed by the results from the first half of the year. In the months to come, we will observe further interest in land designated for office developments, especially in Warsaw and Wroclaw but also in Cracow, Tri-city and Poznan. The demand for land for residential developments in the largest cities is not less, primarily in the capital.

Until June 2012, Colliers International brokered in transactions on both office and residential investment land market, the total value of which amounted to around PLN 320 million. Compared to 2011, the present year witnessed a decrease in prices of land for office and residential investments.

As a result of new legal provisions which became final in April 2012, residential developers started the process of consolidation, as only the largest and most financially stable companies will be able to meet the requirements set out by the lawmakers. Consequently, some of the smaller development companies may be put up for sale or will look for possibilities of joint enterprises and new investment offers will appear in the market. The process of making offers and negotiations will however take place in the privacy of offices.

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