Industrial space take-up in Poland has now hit 1.6 million sqm for the year. The share of speculative developments of space under construction has increased while the vacancy rate has dropped. Advisory firm JLL summarizes the situation on the Polish industrial market at the end of Q3 2015.
Tomasz Olszewski, Head of Industrial CEE, JLL commented: “Despite the slight decrease in industrial demand in Q3 as compared to previous quarters, the sector’s year-to-date results still add up to its best year ever. Since the beginning of the year, gross demand for warehouse and production space in Poland has totalled 1.6 million sqm; 433,000 sqm of which was leased during Q3. If the take-up figures in Q4 are similar to those registered in the previous three quarters, we anticipate that Poland’s industrial market will register record-breaking demand for the third consecutive year.”
Since the beginning of the year, net demand has reached 1.07 million sqm. The most active sectors in 2015 have been logistic operators (accounting for 30 percent of net demand), followed by retail chains (20 percent), light manufacturing (13 percent) and automotive companies (11 percent).
The largest lease transaction concluded during 2015 involved Leroy Merlin, which leased 53,000 sqm in Panattoni Park Stryków II. The most prominent renewal was by Goodyear, which renegotiated the lease of 46,000 sqm in Tarnów Logistic Park.
Since the start of 2015, nearly 59 percent of tenant activity has been concentrated in just three regional markets, i.e. Central Poland (21 percent), the Warsaw Suburbs (20 percent), and Upper Silesia (17 percent).
Jan Jakub Zombirt, Associate Director, Research and Consulting at JLL, said: “At the end of Q3 2015, total modern warehouse stock in Poland stood at 9.63 million sqm, making Poland the ninth largest European market in terms of supply. Furthermore, construction activity continues apace. Since the beginning of the year, the industrial market has gained 839,000 sqm of space with 392,000 sqm being delivered in Q3 alone.”
The largest volume was delivered in Wrocław (109,000 sqm), followed by Upper Silesia (61,000 sqm) and Poznań (51,000 sqm). In the Tri-City developers delivered 39,000 sqm; however, taking into account the markedly smaller supply in this market, this figure can be viewed as being on the high side.
“Around 663,000 sqm of modern industrial space is currently under development. 42.3 percent of this new supply consists of projects developed on a speculative basis without binding pre-lease agreements,” added Jan Zombirt.
At the end of Q3, the vacancy rate stood at 6.5 percent, which was a decrease on Q2′ s 7.4 percent. Of the five major regions, the largest proportions of immediately available space were found in the Warsaw Inner City.
“Interestingly some of the emerging locations, such as Rzeszów, Toruń, Opole and Lublin, currently do not offer any units whatsoever. However, in Rzeszów and Toruń there are speculative projects currently underway which should increase availability going forward,” explained Tomasz Olszewski.
A further decrease in headline rents was seen in Upper Silesia, where they now range from €2.8 to €3.5 sqm/month. Rents in the remaining regions remained stable throughout Q3.