Yield and Cap Rate in PBSA — How to Read the Investor's Metrics
PBSA yields in Poland run 5.5-6.5% per Savills 2025. What that means, how to calculate it, and how it compares with apartments and offices. A real investment worked example.
Yield is the foundational metric for the value of a real-estate investment. But in PBSA there's a nuance — different metrics measure different things. A novice investor often confuses gross yield, net yield, cap rate and ROE. Let's look at each one.
The four core metrics
Gross Yield: Annual rental income / purchase price × 100%
Example: a unit bought for PLN 500,000, rent of PLN 3,000/month × 12 = PLN 36,000/year. Gross yield = 36,000 / 500,000 = 7.2%.
Net Yield: (Annual income − operating costs) / purchase price × 100%
PBSA operating costs: the operator's fee (10-15%), taxes, insurance, sinking fund.
Example: 36,000 − 5,400 (15% fee) − 1,500 property tax − 800 insurance − 1,000 sinking fund = PLN 27,300. Net yield = 27,300 / 500,000 = 5.46%.
Cap Rate (Capitalization Rate): Net Operating Income (NOI) / purchase price × 100%
NOI = rent − operating costs, but excluding financing costs (loan interest).
In PBSA, cap rate and net yield are usually identical when the investor buys with cash.
ROE (Return on Equity): Annual net profit / equity capital × 100%
ROE accounts for financial leverage (debt). It can be higher or lower than the yield, depending on the cost of debt.
The Polish PBSA market — yields per Savills 2025
According to the Savills report "Rynek PBSA w Polsce 2025" (The PBSA Market in Poland 2025):
- Cap rate for high-quality PBSA assets in Poland: 5.5-6.5%
- For comparison:
- Class A offices in Warsaw: 6-7%
- Buy-to-let apartments (LTV=0%, NBP Q3 2024): ~3.3% ROE
- Class A logistics warehouses: 5-6%
PBSA is attractive vs apartments (markedly higher yields) and close to offices (with a different risk profile).
A full calculation example
A 22 m² studio in Kraków, purchased for PLN 480,000:
Annual income (rent PLN 2,800 × 12): PLN 33,600 At 95% occupancy (PBSA runs ~100%, but conservatively): PLN 31,920
Operating costs:
- Operator's fee (12% of income): -PLN 3,830
- Property tax (~0.4% of value): -PLN 1,920
- Insurance: -PLN 800
- Sinking fund (0.5% of value/year): -PLN 2,400
- Other (e.g. common-area charges): -PLN 1,000
Total operating costs: PLN 9,950
NOI: 31,920 − 9,950 = PLN 21,970/year
Cap rate / net yield: 21,970 / 480,000 = 4.58%
That is below the PBSA average (5.5-6.5%). Possible reasons:
- The purchase price was too high (overpriced)
- Rent below market (the operator could raise it)
- High operating costs (renegotiate with the operator)
What drives yield
1. Location. Premium locations (Warsaw Mokotów, Kraków AGH) carry a lower yield (4.5-5%) but greater capital-growth potential. Secondary locations (Łódź, Katowice) — higher yield (6-7%) but lower capital growth.
2. Asset standard. Premium (Noli, LivinnX) = lower yield, but more stable income. Value (Basecamp, Tribera) = higher yield, but higher turnover.
3. Operator. An experienced operator (Xior, Kajima) = lower occupancy risk. A weaker operator = higher vacancy risk = higher nominal yield, but lower real yield.
4. Room type. A studio with a kitchenette = higher rate/m² but higher CapEx. A shared twin = lower rates but better occupancy.
5. Market conditions. PBSA in a growth phase (2025 = EUR 200 million in volume per Savills) — yields lower. A saturation phase — yields higher.
The trap — yield ≠ return
A novice investor looks only at yield. An experienced investor looks at:
Total return = yield + capital growth + tax benefits
Example over a 10-year horizon:
- Average yield: 5.5%
- Capital growth (value rises ~3-4%/year in PBSA Poland): 35% cumulative
- Rent inflation (3-5%/year): rent +50% after 10 years
Total return per year = ~9-11% IRR (Internal Rate of Return).
That is considerably more than the raw 5.5% yield.
Yield compression — a European phenomenon
In Western Europe, PBSA yields compressed from 7% (2015) to 4-5% (2024). Poland is 5-10 years behind that cycle.
Implications for the investor:
- Early entry = higher yield (6%+ today)
- Within 5-10 years = yield compression → the unit's value rises (cap rate falls as the yield normalizes toward Europe)
- Capital appreciation could be substantial for investors entering now
Yield vs alternative asset classes
| Asset class | Typical yield 2026 | Risk profile |
|---|---|---|
| Buy-to-let apartment (LTV=0%) | 3.3% (NBP) | Medium |
| Government bonds | 5-5.5% | Very low |
| Studios for short-term let | 8-12% (Airbnb) | High |
| PBSA Poland (cap rate) | 5.5-6.5% (Savills) | Medium |
| Class A offices | 6-7% | Medium-high |
| Logistics warehouses | 5-6% | Medium |
| Business hotels | 7-9% | High |
| European REITs (PBSA) | 4-6% | Low (diversification) |
PBSA Poland offers a good yield/risk ratio — comparable to offices, but with a stronger structural demand outlook.
What to do as an investor
1. Don't buy on nominal yield without context. A 7% yield in a weak location can be worse than a 5% yield in a prime one.
2. Calculate net yield, not gross. The operator will take 10-15%. Taxes, insurance, sinking fund = 1-2%. Real yield = gross − 12-18%.
3. Model a 10-year horizon. Yield + capital growth + inflation = total IRR. That is a meaningful comparison with other asset classes.
4. Check the historical occupancy rates of the specific asset. PBSA averages ~100%, but a specific asset may run at 85% (e.g. a peripheral location).
5. Understand the operator's fee. 10% vs 15% is a 5-percentage-point difference in yield. Negotiate.
Conclusion
Yield in PBSA is an honest 5.5-6.5% net for good locations in Poland (Savills 2025). That is more than apartments (3.3% NBP), and comparable to offices.
Full investment return = yield + capital growth + rent inflation = 8-11% IRR over a 10-year horizon.
But don't buy on yield alone. Location, operator, asset standard and market context matter just as much.
Sources
- Savills Polska — Rynek PBSA w Polsce 2025 (The PBSA Market in Poland 2025)
- NBP — Q3 2024 raport o nieruchomościach (Q3 2024 real-estate report)
- Knight Frank European PBSA Investment Report 2024
