In the first half of 2017 the warehouse market was unquestionably the fastest growing commercial property sector in Poland. The highest volume of industrial and warehouse space was delivered to the market around Poznań, i.e. 133,000 sqm, while the largest scheme of 161,000 sqm is currently under construction in Szczecin. The record numbers in respect of the schemes delivered to the market are not discouraging developers from commencing new projects.
Record first half of the year
The first six months of this year saw the completion of schemes with the record surface area of 801,200 sqm. The highest volume of space, following Poznań, was delivered to the market in the Warsaw II zone (115,700 sqm) and Central Poland (111,800 sqm). This is confirmed by the three largest transactions completed in respect of schemes delivered to the market in the specific clusters. In the Upper Silesia region Amazon became the new tenant in the Panattoni BTS Amazon Sosnowiec scheme with the surface area of 135,000 sqm under a build-to-suit agreement. In Central Poland two lease transactions were completed in respect of BTS Castorama with the surface area of 101,700 sqm by Castorama and Panattoni Łódź BSH BTS with the surface area of 79,000 sqm by BSH.
Szczecin under construction
Developers do not seem to be discouraged by the number of schemes delivered to the market, particularly when we look at the volume of space currently under construction: 1,275,000 sqm. The largest projects include those being developed in Szczecin (Panattoni BTS Amazon – 161,000 sqm and Goodman BTS Zalando – 130,000 sqm) and in Sosnowiec (Panattoni BTS Amazon – 135,000 sqm).
The Polish warehouse market is attracting attention of foreign players as it skilfully combines relatively low rents with increasingly better standard and advancement level of the schemes developed. Additionally, it has to be stressed that over the coming quarters the Szczecin region will impact on the balance of power in the regions as its strategic location, availability of qualified workforce and the record number of schemes under construction with nearly 300,000 sqm of surface area, will all come into play
Katarzyna Pyś-Fabijańczyk, Head of Industrial & Logistics Department, BNP Paribas Real Estate Poland
Rents remain stable
Strong demand for new space translates into completion of transactions in respect of newly developed schemes, however it does not affect asking rents. In most of the regional cities analysed rents did not change from January to June, which results from the balance between the growth in supply and the growing demand from tenants. Consequently, the highest lease costs are encountered for warehouses located within the boundaries of Warsaw: between 3.5 and 5.00 EUR/sqm/month, while the lowest ones are recorded in Central Poland: between 2.00 and 3.2 EUR/sqm/month, which is due to the dominating presence of large logistics parks.
Consistent demand combined with high availability of land for industrial and warehouse schemes are factors that cause rents to have remained stable for many quarters now. Additionally, it has to be highlighted that as compared to Western Europe, the cost of leasing space in Poland continues to be considerably more competitive
Anna Staniszewska, Head of Research & Consultancy, CEE, BNP Paribas Real Estate Poland
Central Poland with a minimum vacancy rate
The vacancy rate as compared with the end of Q1 2017, dropped by 0.4 p.p. and stands at 5.9%. What affects it significantly is the fact that the warehouses delivered to the market are mostly leased. The volume of pre-let space in the schemes currently being developed is nearly 80%. The highest vacancy rate in Q2 was recorded in the Kraków region: 11.9%, while the lowest one, standing at only 0.5%, was recorded in Central Poland.
-
Warsaw I
- The highest rents for warehouse space in Poland are recorded in Warsaw I cluster
- Warehouse schemes are smaller than in other clusters. Also, they often offer more office space and form Small Business Units (SBU)
- The vacancy rate remains at 8.7%. It is one of the highest in Poland.
- Limited availability and high land prices significantly reduce cluster development
Warsaw II
- Warsaw II is the largest warehouse market in Poland. It accounts for 22.4% of the country’s total stock
- In Q2 2017 the total volume of stock under construction was 272,100 sqm, which is the second highest result among all warehouse markets in Poland.
- Supply grew by over 100,000 sqm in Q2. The largest scheme delivered was another phase of P3 Błonie (47,500 sqm)
- The rapid increase of the new supply and the dominance of large-scale projects affects rental rates, which are stable and remain at one of the lowest levels in the country
- New transport infrastructure in the eastern (S8, A2) and southern (S8, S19) parts of the hub will result in warehouse development in these directions over the following years
Upper Silesia
- Upper Silesia remains the second largest market in Poland after Warsaw II
- Warehouse space increased by 23,000 sqm in Q2 2017, following the delivery of Goodman Gliwice Logistics Centre and Segro Logistics Park Gliwice
- Despite completion of new supply, vacancy rate decreased by 0.2 p.p. compared to the end of Q1. This demonstrates undiminishing tenant interest.
- There are 253,200 sqm under construction, of which more than a half is Panattoni BTS Amazon Sosnowiec
- The range of rental rates in Upper Silesia is similar as in other major warehouse clusters
Poznań Hub
- Poznań hub recorded the highest growth of new space out of all industrial and logistics clusters in H1 2017
- The largest projects completed in Q2 2017: another building of Panattoni Park Poznań VIII (21,300 sqm) and P3 Poznań (7,300 sqm)
- Because of the delivery of new space, the vacancy rate has slightly increased by 0.4 p.p. to the level of 8.8%
- Rents are stable, but the relatively high percentage of vacancy and the volume of new schemes, can strengthen further tenant negotiating positions
- There is an increasing number of warehouses being built in the area between Poznań and the German border, along major transportation corridors
Central Poland
- The central location, well developed transport infrastructure and relatively good access to the labour force make the cluster constantly popular among tenants
- Central Poland is characterised by the lowest vacancy rate in the country. It reached only 0.5% at the end of June. This means a drop of 1.8 p.p. as compared to the end of Q1 2017
- There was only one warehouse delivered on this market in Q2 2017 - another phase of Prologis Park Stryków (18,100 sqm). The completed scheme was fully leased upon delivery, which is typical for Central Poland Region
- Currently, the largest buildings under construction are the next stage of the Segro Logistics Park Stryków (30,400 sqm) and Panattoni Park Stryków II complex (18,600 sqm).
Lower Silesia
- Lower Silesia owes its development to good transport infrastructure and proximity to the southern and western borders of the country
- There was no new warehouse scheme delivered to this hub in Q2 2017
- The second quarter of the year brought an increase of vacancy rates by 0.6 p.p., which reached 7.9%
- Rental rates in the Wrocław area belong to one of the highest among the main industrial and logistics hubs (excluding the area within the boundaries of Warsaw)
- At the turn of 2017 and 2018, a part of the S5 expressway to the north of Wroclaw shall be completed. It will improve links between Poznań and the northern part of Poland and will create favourable conditions for the development of the warehouse market to the north of the city
Tri-city hub
- The Tri-City region is the largest industrial and logistics market in Northern Poland. The proximity of international seaports, airports and expressways contributes to the development of intermodal transport
- Delivery the next phase of Goodman Pomeranian Logistics Center increased the total warehouse supply in Tri-city by 20,900 sqm
- Despite completion of new supply, vacancy rate decreased by 1.5 p.p. compared to the end of Q1
- At the end of June, there were two A-class warehouses under construction – another phase of Goodman Pomeranian Logistics Center (36,700 sqm) and Hillwood 7R Gdansk 2 (12,000 sqm)
Lublin/Rzeszów
- There was only one scheme delivered to this market in Q2 2017 - Waimea Cargo Terminal Rzeszów-Jasionka (4,900 sqm).
- The total warehouse space under construstion is equal to 16,900 sqm, with the largest scheme being MLP Lublin (12,100 sqm).
- The planned completion of the S19 expressway between Warsaw and Lublin in 2019 will significantly improve communication with the capital and should increase the potential for the development of the industrial and logistics sector in this area
- Route S19 between Lublin and Rzeszow, which is a part of the route Via Carpatia, is currently in the process of a public tender
Cracow hub
- There was no new delivery in Cracow region in Q2 2017
- Vacancy rate in the hub fell by 3 p.p. and stood at 8.9%, which still is one of the highest results out of the analysed clusters
- The high vacancy rate resulted in a meager volume of space under cosntruction (17,600 sqm)
- Issues connected with attracting occupiers to Cracow Hub have put pressure on the rental ranges, which reduced prime headline rates. Still, Cracow remains the second most expensive warehouse market after Warsaw
Bydgoszcz/Toruń
- Only in the H1 2017, the industrial and logistics market in the Bydgoszcz / Toruń Hub increased by 74%. It was caused by delivery of the three large-scale warehouse schemes in Q1, the largest of which was Panattoni BTS Kaufland (45 650 sqm)
- Currently, there is only one scheme under construction – Waimea Logistic Park Bydgoszcz (16,200 sqm) consisting of two buildings
- Delivery of new supply and expiry of significant lease agreements resulted in an increase in vacancy rate by 6.4 p.p. in comparison to the end of 2016. Currently the share of space available accounts for 7.5%.
Szczecin hub
- The only finished schems in H1 were two schemes were delivered in Q1 on the Szczecin warehouse market: Panattoni Park Szczecin I (12,800 sqm) and Prologis Park Szczecin I (9,300 sqm)
- The vacancy rete did not fluctuate over Q2. Currently 9% of existing stock remains available
- The total space under construction amounted to 293,500 sqm, which is split between the two large BTS schemes designed for e-commerce giants – Amazon and Zalando
- Thanks to the proximity of the German border, relatively high labour availability and the development of transport infrastructure the Szczecin market is very popular among the e-commerce companies
