An excellent opening to the year in terms of industrial gross take-up – 680,000 sqm of warehouse space leased in Q1 2016, and 640,000 sqm of space under construction with 54 percent being developed on a speculative basis, summarized advisory firm JLL on the situation of the Polish industrial market at the end of Q1 2016.
Tomasz Mika, Head of Industrial Poland, JLL, said: “We witnessed a particularly strong opening to the year on the Polish industrial market. In Q1 2016, total demand reached 680,000 sqm, which was the best first quarter result in the last decade and augurs well for the remainder of the year. In addition, Poland’s industrial and warehouse stock crossed the 10 million sqm threshold in Q1. This makes Poland the ninth largest market in Europe”.
In Q1 2016, the highest occupier activity was recorded in the Warsaw Suburbs, where tenants leased a total of 184,000 sqm, followed by Upper Silesia (142,000 sqm) and Poznań (123,500 sqm). The biggest lease agreement was signed by Kaufland (45,000 sqm) in Panattoni Park Bydgoszcz.
By the end of Q1 2016, Poland’s total industrial and warehouse stock was 10.37 million sqm. 418,000 sqm of new space was delivered to market in the first three months of the year. The majority of new projects were completed in established locations such as Warsaw Suburbs (137,000 sqm), Upper Silesia (87,000 sqm) and Central Poland (85,000 sqm).
“Developer activity continues to be strong in the market. Currently, there is 640,000 sq m of space under construction, which places the industrial market behind the office segment but ahead of the shopping centre sector. The largest volume of warehouse space under development is in Poznań – 160,00 sqm, followed by Warsaw Suburbs – 108,000 sqm and Central Poland – 106,000 sqm,” commented Przemysław Ciupek, Senior Research Analyst at JLL.
He added: “54 percent of industrial space currently being developed is on a speculative basis – without binding lease agreements. In comparison, by the end of Q1 2014 this total was a mere 5.5 percent. This clearly confirms investor trust and confidence in the growth potential of the Polish industrial market,” added Tomasz Mika.
At the end of Q1 2016, the vacancy rate stood at 6.7 percent, which represented a small increase on Q4 2015’s 6.2 percent. The highest vacancy rate is in the Warsaw Suburbs (11.8 percent of overall stock). Smaller markets, such as Szczecin and Opole have zero vacancy.
According to warehousefinder.pl, prime headline rents have remained stable throughout Q1 2016 with the most expensive industrial space still being recorded in Warsaw Inner City (€4.1 – €5.3 / sqm / month) and Kraków (€3.8 – €4.5 / sqm / month). The lowest rents for big box units are in Central Poland and range from €2.6 to €3.2 / sqm / month. Nevertheless, it is worth underlining that the above values do not include owners’ incentives and should be treated as a basis for further negotiations.
