The warehouse market in Poland maintained its strong upward momentum in 2015, with more than 925,000 sq m of new industrial space delivered and take-up rising to a record 2,470,000 sq m. According to Cushman & Wakefield’s report “Property Times”, a significant number of industrial and logistics developments are expected to break ground underpinned by high absorption and demand levels.
At the end of 2015 total modern warehouse stock in Poland stood at 9,895,000 sq m. Nearly all regions recorded growing development activity, particularly Poznań, Upper and Lower Silesia, as well as emerging markets such as Lublin, Rzeszów and Szczecin, which witnessed an increasing number of new development sites prepared for the construction of modern warehouses and logistics facilities.
Take-up rose to 2,470,000 sq m, up by 5% on 2014’s total, pushing the vacancy rate down from 6.8% to 5.2%. The highest vacancy rates are in Warsaw City (9.7%) and the Warsaw Suburbs (7.3%), and the lowest in Poznań (1.9%).
In 2015, industrial take-up was driven by companies operating in the logistics sector, followed by automotive and light manufacturing industries, and retailers. Occupiers’ interest to a greater extent continues to focus on the core markets including Central Poland (22%), Warsaw Suburbs (20%) and Upper Silesia (17%), while Poznań and Wrocław noted comparable demand (10% each). This being said, there is a noticeable increase in occupier demand in the smaller submarkets such as Szczecin and also new locations such as Bydgoszcz. The largest lease transactions included Goodyear’s renewal and expansion in Tarnow Logistic City Park (56,000 sq m), BTS development for Leroy Merlin in Panattoni Park Stryków II (53,000 sq m) followed by Corning’s renewal of 43,000 sq m in SEGRO Logistic Park Stryków.
With approximately a 30% share in Poland’s total stock, Warsaw with its suburbs remains the largest warehouse sub-market. Improving transport infrastructure has facilitated the development of other regions such as Upper Silesia, Central Poland, Poznań and Wrocław, which together account for nearly 59% of the country’s stock. The strongest development activity was noted in the Poznań (23%) and Upper Silesia (17%) regions followed by Wrocław (12%) and Warsaw Suburbs (10%).
Among warehouse owners, Prologis currently has the largest portfolio with a 23% share of Poland’s total developed industrial space. The remaining top six industrial owners are SEGRO (11%), Panattoni (10%), Logicor (9%), Goodman (7%), P3 (5%) and MLP Group with 4% of total stock.
Headline rents remained flat or fell slightly in core warehouse markets in Poland. The highest rents were posted in Warsaw’s inner city (EUR 4.00–5.40/sq m/month); the lowest were in Central Poland (EUR 2.40–3.95/sq m/month) and in the Warsaw Suburbs (EUR 2.40–3.80/sq m/month).
“The Polish industrial market has performed extremely well over the last two years with leasing volumes setting new highs and development activity approaching the peak levels noted in the years 2007–2009. With net take up at a level of more than 1.7 million square the demand for modern space is continually on the rise with occupiers from sectors such as logistics, automotive and FMCG again being dominant. The growth of e-shopping in CEE likewise will lead to more requirements coming to market and in many cases we can expect the space needs to be very large (50,000 sq m +). Over the course of last year we witnessed further expansion of the market not only in the core locations but also with new locations opening up as a result of road improvements and affordable development sites being available for developers to construct new facilities,” said Tom Listowski, Partner and Head of Industrial and Logistics Agency Poland and CEE Corporate Relations, Cushman & Wakefield.
There is an impressive amount of warehouse space in the development pipeline, comprising nearly 1 million sq m, however, no substantial rise in vacancies is expected because more than 60% of projects are either built-to-suit schemes or schemes that have secured pre-lets. The market is seeing a growing number of speculative projects underpinned by growing demand for industrial space. Poland’s economic growth and the expansion of the country’s road network will be the main factors driving the industrial and logistics market, encouraging other tenants to enter the Polish market.