At a Glance Q4 2017

A record-breaking year for warehouse and logistics space ahead of us

12 March 2018

The data provided in the annual AAG Industrial & Logistics Market Review report confirms that the sector with its stock of more than 13.5 million sqm was the fastest growing commercial property sector in 2017. The year saw the total volume of space increase by 21% as compared to 2016. The schemes developed as build-to-suit projects continue to be the driving force here. At the same time, authors of the analysis highlight the decrease in the share of speculative projects.

The sound condition of the sector is confirmed by the high growth dynamics in terms of new space, where the period between January and December 2017 saw the delivery of 77% more space than in 2016. The second half of the year proved to be of key importance from the market point of view, with developers completing and delivering 66% of 2.36 million sqm of space in new schemes. The clusters to have grown the most are those located around Warsaw (389,900 sqm) and Szczecin (315,500 sqm). The excellent result achieved by the latter location comes from the completion of two significant BTS schemes: BTS Amazon Szczecin (161,000 sqm), the largest warehouse facility in Poland, and Goodman BTS Zalando Szczecin (130,000 sqm). However, main players in the domestic warehouse and logistics sector were the market surrounding the Warsaw agglomeration and Poland’s logistics centre of gravity, i.e. the schemes located around Łódź and the nearby junction of the A1 and A2 motorways, which are addressed mainly at businesses running countrywide distribution operations.

A time for developers

The large number of new schemes appearing on the market has not lead developers to lose interest in undertaking new projects. Experts at BNP Paribas Real Estate Poland stress that more than 1.43 million sqm of warehouse space is currently in various stages of development. The largest schemes are Panattoni BTS Amazon Gliwice (146,000 sqm) and Central European Logistics Hub (115,000 sqm) in Łódź. The experts highlight that the dynamic growth of the e-commerce industry remains the key impulse for growth of the sector.

The interest shown in the sector is enormous. Following months of monitoring the growth opportunities on our market and in our region, players from the Middle Kingdom have now moved to the scheme development phase. Right at the beginning of the year we finalized a lease agreement for several thousand square meters of space for one of the Chinese logistics operators. We believe that this was not the only transaction of this type to take place in the nearest future. For businesses from the Far East, the Central and Eastern Europe region is extremely attractive as far as availability of investment land for schemes larger even than 100 000 sqm is concerned

Katarzyna Pyś-Fabiańczyk, Head of Industrial & Logistics Department, BNP Paribas Real Estate Poland

Vacant space on a downward slope

At the end of last year the percentage of warehouse space waiting for tenants oscillated around 5.4%. The vacancy rate recorded a drop by 0.7 p.p. y-o-y resulting, amongst others, from high demand supported by BTS schemes and a number of pre-let agreements. It is estimated that more than a half, approx. 60%, of newly built warehouses have already found tenants.

Stable rents

It follows from the analysis carried out by BNP Paribas Real Estate Poland that despite the significant volume, stock currently under construction is met with high demand, which consequently allows to keep the balance between landlords and tenants and prevents sudden fluctuations in rents. Last year rents oscillated between 2-5 EUR/month depending on the region. Subsequently, the most expensive warehouse and logistics locations continue to be those located within Warsaw boundaries, which results from the limited availability of development land, low supply and the close vicinity of key markets.