At year-end 2017, Poland’s total industrial stock surpassed 13.5 million sq m. Supply hit a record high of 2.36 million sq m, double the level recorded in 2016. The largest volumes of new warehouse space were delivered in Warsaw’s suburbs (448,000 sq m), Upper Silesia (422,000 sq m), Szczecin (320,000 sq m), Central Poland (282,000 sq m) and Poznań (216,000 sq m).
There is a growing demand for large-scale logistics schemes. Last year’s completions include BTS schemes developed for Amazon by Panattoni in Szczecin (161,000 sq m) and Sosnowiec (135,000 sq m) and a 130,000 sq m BTS scheme completed for Zalando by Goodman in Gryfino near Szczecin. Other developments averaged approximately 20,000 sq m, the largest being H&M’s 60,000 sq m project in Bolesławiec and Castorama’s 50,000 sq m scheme in Stryków, both developed by Panattoni. In addition, P3 completed the next phases of P3 Piotrków (56,000 sq m) and P3 Poznań (54,500 sq m). Developer activity continues its strong momentum.
There is currently 1.44 million sq m of warehouse space under construction, of which 66% has been secured with pre-lets. The highest concentration of the development pipeline is in Upper Silesia (411,000 sq m), Central Poland (300,000 sq m) and Warsaw’s suburbs (217,000 sq m).
Take-up set a record high in 2017 with 4.09 million sq m transacted, up by 1 million sq m compared to 2016. New leases and expansions accounted for 77% of all deals while renegotiations made up 23%. As in previous years, demand was largely driven by logistics operators with a 31% share in the leasing volume, followed by retailers (17%), e-commerce (16%) and manufacturing (11%). Nearly 65% of the leasing activity was recorded on the three core markets: Central Poland (964,000 sq m), Upper Silesia (880,000 sq m) and Warsaw’s suburbs (804,000 sq m). Wrocław and Poznań attracted weaker occupier interest with 305,000 sq m and 265,000 sq m transacted in the two regions, respectively. The largest leases were signed for BTS schemes, including Zalando’s 124,500 sq m lease in Głuchów near Łódź (Goodman), Smyk’s 73,000 sq m lease at Central European Logistics Hub Łódź and Carrefour’s lease in Rawa Mazowiecka (63,000 sq m).
Healthy occupier demand and a small proportion of speculative developments kept the warehouse vacancy rate low with 732,000 sq m of warehouse space vacant in December 2017, accounting for 5.4% of Poland’s existing stock. Although the vacancy rate remained unchanged for a third consecutive quarter, it edged down by 1.3 pp. compared to where it was at year-end 2016. Headline rents remained flat on the most of warehouse markets, standing at EUR 2.40–3.60/sq m/month at year-end 2017. Effective rents which are lower due to financial incentives offered to tenants stood at EUR 1.90–3.20/sq m/month.
The Polish industrial market is expected to continue its upward momentum, fuelled by a positive macroeconomic outlook, including the projected GDP growth of 3.8% in 2018, growing consumer spending and industrial activity. As in 2017, demand for warehouse space and specialist logistics services will continue to be driven largely by the expansion of e-commerce. Going forward, supply and take-up are expected to remain healthy on Poland’s core warehouse markets with continued growth of smaller regional markets and emerging locations such as Kielce, Białystok, Zielona Góra, Świecko and Opole. The availability of highskilled labour will become an increasingly important factor in the choice of a warehouse location. Rising development costs due to rising costs of building materials and services may also hamper further market growth. Therefore, following a long period of stable rents, developers are likely to scale down financial incentives, which in turn may push effective rents up.