The warehouse market in Greater Poland is driven by logistics companies. Despite the outbreak of the war in Ukraine, Poznań, which is located 260 km from Berlin, remains a convenient transit hub for goods moving between the West and East, say Natalia Mika and Patryk Podgórski, Advisors from the Industrial and Warehouse Department at Newmark Polska.
Poznań is one of the fastest-growing warehouse markets in Poland. At the end of Q3 of this year, Greater Poland’s total warehouse and industrial stock exceeded 3.3 million sqm. Of that total, more than 20 percent (over 673,300 sqm) is in Poznań, another 16 percent (537,000 sqm) in Gądki and more than 12 per cent (over 407,300 sqm) in Komorniki.
The key strengths of the region are a short distance to Berlin, a strong network of national roads and the proximity of the A2 motorway. Another advantage is the presence of an international airport which is located close to Poznań’s centre and offers flights to major hubs such as Munich, Amsterdam and Warsaw. New flight routes continue to be added to enable travel to many European cities, with a new service to Dubai from October this year.
“Poznań is a compact city with a well-developed modern public transport system that benefits both its residents and employees. It is considered to be a major business centre in Poland. Our city has a diverse economy and is home to both international companies such as Volkswagen, Bridgestone, GSK, and local firms including Żabka, Allegro, and Raben,” says Katja Lőžina, Director of the Investor Services Bureau of the Poznan City Office. “Poznań has also been dubbed the fair capital of Poland, with the Poznań International Fair being undoubtedly the biggest fair not only in Poland but also in Central and Eastern Europe. It is also a major academic centre – one in five people here is a student,” adds Katja Lőžina.
Logistics providers are leasing but are taking longer to decide
Being one of Poland’s five core warehouse markets, Poznań reflects nationwide trends. Companies are showing increased caution about lease decisions, as evidenced by statistics for the three quarters of this year. Warehouse take-up for the nine months to September in Greater Poland was 330,500 sqm, more than 55 per cent less year-on-year from 732,900 sqm.
“The warehouse market in the region is driven by logistics companies. Although this market has shrunk slightly since the outbreak of the war in Ukraine, Poznań remains a convenient transit hub for goods moving between the West and East. Logistics service providers have, however, also shown more caution concerning new leases in the past year. The overall economic slowdown, which has brought with it less predictable demand from clients, has sparked a cooling of sentiment in the sector, with fewer transactions recorded,” says Natalia Mika, Advisor, Industrial and Warehouse Department, Newmark Polska.
The current declines are, however, calculated against the record values of previous years. In 2021 and 2022, Greater Poland saw many high-profile transactions for big-box warehouses of 50,000–100,000 sqm. “Companies are now leasing much smaller facilities. They are assessing their needs carefully and choosing not to lease extra square metres to have them in reserve. Looking ahead, we will also see more consolidations or relocations of a tenant’s operations from several buildings to a single one. The goal is to reduce the carbon footprint – to be greener and closer to consumer markets,” explains Patryk Podgórski, Advisor, Industrial and Warehouse Department, Newmark Polska.
The largest warehouse deals of the past 12 months were finalised by: Raben in City Logistics Poznań III (44,000 sqm, Q3 2023), a confidential logistics provider in Panattoni Park Poznań XI (21,000 sqm, Q4 2022) and 7R Solution in 7R Park Poznań West (19,000 sqm, Q2 2023). Nevertheless, it was in Q3 2022 that the record transaction of the past year was signed: an e-commerce company leased 82,000 sqm in Panattoni Park Poznań A2.
Speculative construction bodes well
Poznań’s convenient location is driving growing interest in this market among logistics companies. “According to statistics from Newmark Polska, at the end of September 47 per cent of the total development was not pre-let, indicating that developers chose to build some space speculatively. And this bodes well for the future. Logistics providers are also opting for build-to-own projects in key locations across Greater Poland while still leasing some space. Build-to-suit leases accounted for almost 20 per cent of leases in the region in January-September 2023. This model has been embraced by DHL and Raben,” says Natalia Mika.
The largest completions in the region in the past year were: P3 Poznań II in Robakowo (77,350 sqm), Panattoni Park Poznań West Gate I in Tarnowo Podgórne (59,600 sqm), MLP Poznań West (58,000 sqm) and Panattoni Park Poznań West Gate II (47,800 sqm).
Small Business Units are needed now
The Poznań warehouse market has remained buoyant in the past few years. In 2022 alone, it saw new supply hit 539,100 sqm – on par with that in Upper Silesia, but more than in Warsaw. On the other hand, in the first three quarters of 2023 added another 286,400 sqm to the region’s modern warehouse stock. However, the new supply was not fully absorbed due to the economic slowdown. At present, vacancy in Greater Poland is at 7 per cent. – almost 1 p.p. less than the average vacancy in Poland.
“We expect that the vacancy rate will remain stable and Poznań will continue to grow at a steady pace. The warehouse market operates in cycles and most leases are finalised towards the end of the year, so we expect leasing activity to gather pace in the last quarter,” says Natalia Mika. “At the same time, we are seeing stronger demand for smaller urban warehouses of 2,000-3,000 sqm. Developers are already responding to it by starting new projects, including the launch of City Logistics Poznań II in Węgorka Street in September. The scheme is expected to deliver 12,750 sqm to the market. In addition, the construction of 7R City Flex Poznań East I (9,500 sqm) is also to start shortly.”
“In Wołczyńska Street the MLP Group will build a new park that will replace existing facilities. The development will incorporate the existing big-box building with an area of more than 10,000 sqm and see six new buildings with small business units offering between 980 and 2,100 sqm, and modern offices of 200-650 sqm. Some of the warehouse modules on offer will include a smaller space, ideal for picking, service or showroom services,” adds the expert from Newmark Polska.
The largest logistics projects underway in Greater Poland include a warehouse for H&M in Panattoni Park Poznań A2 (82,000 sqm), Panattoni Park Poznań A2 (60,000 sqm), Panattoni Park Piła (38,850 sqm) and P3 Poznań II (28,300 sqm).
Heading east to recruit employees
Although Poznań boasts a convenient location, companies looking for logistics or industrial space are likely to face several challenges in the area, including the record low unemployment rates in the city and the Greater Poland province which in September stood at 1,1 per cent and 3 per cent respectively.
“Like in most Polish cities, in Poznań, we are also seeing increased demand for skilled labour, particularly in such sectors as modern business services and IT, but also for people with vocational education. This is why close cooperation of the City, businesses and universities is so important. Our key focus is on developing our priority sectors and IT in particular,” says Katja Lőžina, who believes that low unemployment may be a challenge for employers but those offering appropriate work conditions will have no problems with hiring suitable staff. “Potential investors can tap into a pool of professionals available on the market. Poznań is attractive for companies on account of its well-developed educational infrastructure and strong labour market, and an attractive quality of life in the city,” she adds.
“The western part of Poznań has historically grown at a very fast pace thanks to its logistics and business links with western Europe. It will remain a powerhouse and a driving force for this warehouse region. However, given the local labour market potential, including workforce availability, developers are also starting to look more favourably at plots in the eastern part of the city and to search for opportunities there. This part of the city is being targeted, among others, by Poland’s leading industrial developer Panattoni,” concludes Patryk Podgórski.