The latest Q1 2021 report on Poland by JLL has revealed that the reintroduction of another lockdown on 23 March caused minimal economic damage. Industrial production and retail sales both improved significantly in March, and the dynamic rebound is expected to continue. Oxford Economics now expects GDP growth in Poland to reach 4.3% this year, instead of the previously forecasted 3.5%.

Following the declining Covid-19 infection figures and a faster pace of vaccinations, the government announced that restrictions will be eased throughout May and eliminated by June. The unemployment rate in Poland declined to 6.4% and nominal wages grew 8% year-on-year in March, which suggests resilience in the labour market in Poland.

The total real estate investment volume reached almost €1.4bn in Poland in Q1, which translates into the third-best opening of the year in history (surpassed only by Q1 2020 - €1.9bn and Q1 2018 - €2.1bn).

Almost half (44%) of the investment went into the office sector, with 29% going into warehouses, 14% into retail, 11% into Living and just 2% into hotels. JLL stated: ‘Industrial and Living seem to be the main beneficiaries of the pandemic. However, the investment activity may be limited by a shortage of core product.’

In Q1 2021, prime office yields in Warsaw were 4.50%, whereas yields in the core regional cities (Kraków & Wrocław) stood at 5.75%. However, the vacancy rate for offices, which was expected to rise even before the pandemic, hit 11.4% in Q1, the highest rate since 2017.