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,” comments Katarzyna Pyś-Fabijańczyk, Head of Industrial & Logistics Department at 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 €5.0/sqm/month, while the lowest ones are recorded in Central Poland: between €2.0 and €3.2/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,” added Anna Staniszewska, CEE Head of Research & Consultancy at 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.