The scale and number of transactions in storage real estate in Central and Eastern Europe makes it one of the fastest-growing markets on the old continent. Investors generally are following the growing demand for warehouse space resulting, among other things, from the growing role of e-commerce. At the same time, the strategic location on many north-south and east-west international routes makes the CEE region of Europe a highly desirable destination for warehouse locations. It is one reason why this sector is the only real estate segment currently experiencing year-on-year growth.
Specialists agree that the strongly saturated and competitive western European markets no longer create such attractive opportunities for investors as those provided by CEE markets. Looking at the number of transactions carried out over the past months, it is clear that the investment potential is now being recognised by the largest market players, who are now deploying significant capital in this part of Europe.
What is more, the growing demand from tenants for modern warehouse space, which is also developed in the build-to-suit (BTS) formula, confirms that the steps taken thus far have been very well informed. The stand-out and largest transactions completed in the CEE region over the last year include:
- GLP's acquisition of the Goodman Group's logistics portfolio, which sold all companies from the CEE region. The new owner has taken over all logistics assets as well as the teams working on them in Poland, Czech Republic, Hungary and Slovakia. Transaction value is approximately €1 billion. The acquired portfolio includes 1.3 million sqm of space in more than 40 logistics centres and a land bank of roughly 1.1 million sqm.
- The sale of 158,000 sqm of Mszczonów Park by P3 to Elite Partners Capital.
- A cooperation agreement between DHL Supply Chain Polska and DL Invest Group concerning joint development of the logistics centre DL Invest Park Psary; 200,000 GLA will be realised as part of the first project.
- The purchase by Polish Logistics LLP of the 135,000 sqm Logistic City Piotrków Trybunalski logistics centre.
- Acquisition by Savills Investment Management, on behalf of Korean institutional investors, of the Leroy Merlin distribution centre with an area of over 123,000 sqm. The transaction was worth €71 million.
Poland, the region's largest market, experienced a significant increase in the volume of warehouse leases in the first half of 2020, up by 25% year-on-year to 2.38 million sqm. Especially noteworthy: new leases and expansions accounted for 75% of total volume Among the largest lease transactions on the Polish market were:
- Panattoni BTS Świebodzin for over 200,000 sqm for an undisclosed e-commerce tenant,
- Prologis Park Janki for 73,400 sqm for Euro Net,
- Hillwood Łódź Górna and leasing 72,900 sq. to Amazon,
- DL Invest Group within DL Invest Park Psary for over 42,000 sq.m to DHL.
Further projects are expected to be launched in Poland in the near future, with much focus on Upper Silesia. The exceptional JV of DHL Supply Chain Polska is worth noting: it signed an agreement with Silesian investor and developer DL Invest Group JV to construct the logistics centre DL Invest Park Psary to provide 200,000 sqm of new warehouse space.
Now, having built its portfolio to a value of over PLN 1 billion, DL Invest Group continues to actively pursue its development strategy in the Polish market, based on strong tenant demand.
„Apart from the cooperation with DHL Supply Chain, we are also carrying out a number of BTS projects for Hutchinson, Still, Gefco, Hanex and InPost," says DL Invest Group CEO Dominik Leszczyński. "We are currently working on the expansion of our logistics platform in Poland, where in the next 2-3 years we plan to build from 12 to 14 BTS warehouses for e-commerce companies among others. The projects will be built on land we already own, where the area already allocated for the development of logistic projects currently amounts to 1.6 million sqm. We have invited international investors to cooperate with us and are talking to potential partners about financing further projects. The interest is high."
