According to the latest DTZ report – Property Times – Poland Logistics & Industrial Market H1 2014, the total stock of modern industrial and logistics space in Poland rose to more than 8.07 million sq m, and currently counts a record breaking volume of warehouse space under construction (850,000 sq m). Such a large number of commenced projects under construction results from the positive economic results, growing industrial production, as well as continued development of distribution networks of retailers, especially by the e-commerce and FMCG sectors. The availability of qualified workforce, the proximity to sales markets as well as the steadily developing road infrastructure, are the most important factors drawing foreign investors to the warehouse market in Poland.
Currently more than 90% of the total stock is distributed between 5 hot spots (Greater Warsaw, Central Poland, Upper Silesia, Lower Silesia and the Poznań Region). However, among emerging locations still on the radar of many developers and tenants, are the regions around Kraków, Tricity, Szczecin and Lublin.
Due to the high level of activity by developers, new supply in H1 2014 was almost 50% higher than in H1 2013, amounting to approximately 340,000 sq m.
Currently over 90% of the space under construction has already been pre-let. Such a high level of leased space results mainly from the delivery of built-to-suit schemes by developers. However, speculative projects are becoming more and more popular in regions characterised by lower levels of available space.
As a consequence of the large number of projects planned for delivery in H2 2014, the annual supply volume in the whole of 2014 is likely to total approximately 1.0 – 1.2 million sq m, the highest level recorded since 2008.
The continued development of retailers’ distribution networks , driven mainly by the dynamic development of the e-commerce and FMCG sectors, as well as a number of new logistics companies entering the Polish market, is reflected in the high volume of lease agreements (including new leases, expansions and renewals) signed in the first half of 2014, which accounted for 1.22 million sq m (up some 30% compared with H1 2013). As a result, the vacancy level has fallen to 9.1% in Q2 2014, a 2.0 p.p. drop compared to the 11.1% registered in Q4 2013.
Demand during the whole of 2014 is expected to reach a similar level to the record-breaking volume recorded in 2013 (approximately 1.9 – 2.2 million sq m). However, future demand will largely depend on the macroeconomic situation which will influence the willingness of occupiers to expand and lease new warehouse space. Assuming that the economy in 2014 and 2015 will grow at a faster pace than at present, and taking into account the dynamic growth of the e-commerce and FMCG sectors, we expect that demand for warehousing space will remain strong in the next few months says Bożena Kowalska, Consultant in Consulting & Research at DTZ.
“In H1 2014 we observed an increasing number of tenants deciding to extend leased space in the current location or to move to a newly constructed logistic park, in order to lease additional units. In emerging markets, pharmaceutical and food distributors are ever more willingto move their operations to buildings with higher technical standards which are adjusted to the type of business or legal requirements. Expansion of operations and the growing importance of outsourcing of logistics services are the main factors behind the currently growing relocation and extension trends, which should strengthen over the next few years. Additionally, short-term leases as well as Small Business Units (SBU) offering smaller logistics spaces (a maximum of 600 sq m) are becoming increasingly popular with tenants – adds Bożena Kowalska.
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