“The Polish warehouse and industrial market maintains its strong momentum in early 2018, driven by growing investor confidence in the national economy, further road and transport improvements, significant expansion of e-commerce and healthy demand for income producing assets from investors,” says Tom Listowski, Partner, Head of Industrial & Warehouse, CEE, Cresa.
According to “Occupier Insight: Industrial and Warehouse Market in Poland in 2017”, a report prepared by analysts and experts of global tenant-only real estate advisory firm Cresa, Poland’s total warehouse and industrial stock stands at nearly 14 million sqm. In 2017, take-up hit almost 4.38 million sqm while new supply totalled more than 2.45 million sqm, nearly double the five-year average.
In 2017, the largest volume of new space was delivered in Warsaw (503,600 sqm). The largest warehouse and industrial completions across Poland included Panattoni BTS Amazon Szczecin (161,000 sqm), BTS Amazon Sosnowiec (138,000 sqm) and Goodman BTS Zalando Szczecin (130,000 sqm).
Last year’s largest lease transaction was Panattoni’s transaction with an e-commerce operator to develop a 146,000 sqm BTS scheme in Gliwice. As a result, with the total take-up at 916,200 sqm, up by 60 percent compared with 2016, Upper Silesia came third in terms of leasing volumes, after Central Poland (1,024,000 sqm) and Warsaw (1,105,000 sqm).
2017 also saw record-high demand for BTS schemes, accounting for nearly half the leasing volume noted in Central Poland, 45.6 percent in Upper Silesia, 27.7 percent in Lubuskie, 23 percent in Cracow and 22.2 percent in Wroclaw.
Outlook for 2018-2019
Occupier demand for warehouse and industrial space is expected to remain strong in Poland in the next two years. Below are the key market trends:
· E-commerce, logistics and light manufacturing will continue to drive demand for industrial and logistics space across the country.
· New industrial and warehouse parks will be opening up across Poland in locations which were not previously easily accessible due to a lack of infrastructure. These new locations provide developers a good value proposition compared to some of the more established sub-markets in regards to affordable and available land plots. From an occupier’s perspective, the expansion of the industrial space market into new territories will unlock new labor pools, improve supply chains and provide modern and efficient space as an alternative to the old and antiquated buildings which many companies have been occupying purely due to a lack of available A-class facilities.
· Due to the volume of construction taking place and high demand for building materials and workers within the construction industry, build costs are increasing and will also lead to upward pressure on rents.
· Changes in regulations and previous geographic limitations regarding Special Economic Zones should boost Poland’s attractiveness for major FDI projects being planned in the CEE region.
“Changes in International Financial Reporting Standards (IFRS 16) which come into effect in 2019 will also result in more international companies deciding to own strategic industrial and logistics assets as opposed to committing to a long term lease,” says Bolesław Kołodziejczyk, PhD, Head of Research & Advisory, Cresa Poland.
