Paulius Stulgaitis, Head of Investments at EIKA Asset Management (EAM), explains why it was decided to invest in the Polish commercial real estate (CR) market, what reasons led to the first investments being directed towards the acquisition of business centers, what return investors are aiming to earn, and what are their future plans.
“We started analyzing Poland more than three years ago, because as part of EIKA Group, one of the leading real estate (RE) development companies in Lithuania, we saw that we needed larger and more mature markets. We acquired our first business center in Warsaw on February 28, 2023. After Russia’s large-scale invasion of Ukraine, a large part of Western capital withdrew from Poland, and we assessed this as an opportunity to offer more aggressive pricing and acquire RE at attractive prices. A year later, we acquired a second business center in Poland – in Krakow. We continue to see prospects for acquisitions, because Western capital is returning on a smaller scale and has sufficiently good offers in its local markets,” says P. Stulgaitis.
One in a hundred
He explains why the first look in Poland was towards offices: this sector at that time experienced the largest price correction due to the changes in working habits and geopolitics in the world. According to him, the former “ugly duckling” is today producing excellent results. At least a few more business centers are being analyzed in Poland, which are planned to be acquired. This year, EAM plans to invest about 20 million euros of equity in the office segment. Banks usually finance office objects of very good quality up to 55-60 percent. offering long payment schedules.
“The office market in the three largest cities in Poland is sometimes larger than in Lithuania. In Vilnius, we would count a little more than 1 million sq. meters of offices, while in Warsaw there are at least 6 times more of them, in Krakow – almost 2 times, and in Wroclaw – about 1.5 times. Rental prices in Warsaw are higher than in Vilnius, and in other cities they are similar. If you could choose: to purchase an office in Vilnius for almost 3,000 euros per sq. meter or in Warsaw for almost 2,500 euros per sq. meter, what would you choose? The rental income is identical, but the financing conditions are more favorable in Poland. The list of tenants is fundamentally different – in Poland, especially in its capital, almost all major European or even global companies operate, – says the head of EAM Investments. – It is also important that the real unoccupied area (vacancy) of high-quality, central offices in Warsaw is about 5–7 percent, i.e. those looking for high-class offices, especially larger ones area and in an attractive location, are facing challenges, which indicates a good supply-demand ratio. In Krakow and Wroclaw, the average vacancy rate is about 18 percent and it may seem that purchasing a business center is an unpromising investment. However, if we evaluate the vacant space only in high-quality, newer and well-located business centers, we see a completely different situation, which is more similar to Warsaw.
He also points out that there are many more local and international banks operating in Poland, which are happy to finance individual real estate segments.
“We select the business centers we acquire after analyzing dozens or even hundreds of possible options according to various criteria that determine the attractiveness of the office today and in the future. Therefore, the occupancy of our offices is very good, the banks that acquire them are happy to provide financing, and we often even see fierce competition between banks,” says P. Stulgaitis. “In addition, we allocate time for negotiations, which can last up to a year, until we agree on terms acceptable to all parties, and we are sure that we will earn the expected double-digit return for our investors – about 15 percent. By the way, we calculate that the acquired business centers would be much more expensive to build than we paid when buying the already operating ones.”
Decided to build
Another area of EAM’s investment in Poland is logistics facilities.
“After analyzing the market, we saw that in this segment, the return in Poland, if we were to purchase an already operating facility, is similar to that in Lithuania – about 10 percent. It is also obvious that older warehouses in Poland are destined for reconstruction or large investments in greenery. It is worth noting that so far few people dare to do this, because it is easier to offer very low rental prices. However, such facilities simply do not meet modern standards and are not suitable for tenants with the highest creditworthiness. Therefore, we decided to use the experience gained in Lithuania and develop new logistics centers ourselves. In Poland, we do this with partners,” says the head of EAM’s investments.
The first of three phases of logistics warehouses is being developed near Warsaw Modlin Airport and other important transport arteries in the country with the Polish real estate development company Waimea Holding. Initially, over 26 thousand sq. meters of area will be created here, more than 60 percent of which will be occupied by one of the largest DIY chains in Europe, Bricomarché, which belongs to the international group Les Mousquetaires.
A logistics center is being developed in the west of Warsaw, near the city of Sochaczew, with partner Panattoni, Europe’s largest logistics real estate developer. The majority of this 28,000 sq m building has already been leased by Pilkington Automotive Poland, a division of the global multi-purpose glass manufacturing corporation.
Will invest because the market believes
It is planned to receive up to 10 percent annual return from these investments if the objects are rented and kept in the fund for a long time, and over 20 percent if they are sold after construction. It is planned to invest another 20 million euros of its own funds in logistics objects, because such real estate assets maintain demand in Poland. Banks finance the construction of logistics objects up to 65 percent.
“We continue to plan to invest in Poland because we believe in this market and country. It offers returns that meet the long-term expectations of our investors. However, we are also looking at Western markets, as well as retail properties, to further diversify our clients’ investments,” emphasizes the EAM Investment Manager.
Investment management company EAM was founded in 2016. It is licensed and supervised by the Bank of Lithuania as a manager of alternative collective investment undertakings, entitled to manage investment funds throughout the European Union and the European Economic Area.
“Invest” magazine, July–August 2025.