The first half of 2020 was the strongest on record for the warehouse and industrial market in Poland, says Savills. Despite COVID-19 challenges, take-up set an all-time high halfway through the year. In addition, the leasing volume and the amount of new space coming onto the market were higher in Q2 than in the first three months of the year.
“Q2 2020 results have confirmed that our forecasts from the early days of the pandemic were correct. The warehouse and industrial market demonstrated strong resilience to COVID-19 disruptions. Its outperformance in the April-June period over the previous quarter is a positive sign in particular,” says Kamil Szymański, Head of the Industrial Agency at Savills.
Poland’s total warehouse and industrial stock stood at 19.6 million sqm at the end of June 2020. According to Savills, more than 1 million sqm of new space was added to the market in H1 2020. Having adapted to new sanitary requirements, developers delivered over 40% more new space in the three months to June than in Q1. In the second quarter, however, work began on the construction of only around 350,000 sqm, down by a third year-on-year and by half on the previous quarter. There is an increased risk aversion among developers. The share of speculative projects fell to 38% at the end of June.
2.4 million sqm of warehouse and industrial space was transacted throughout Poland in H1 2020, a 25% year-on-year increase. New leases and expansions accounted for most of that total, with renegotiations amounting to approximately 600,000 sqm. The largest gross take-up volumes were posted in Warsaw, Central Poland and Upper Silesia. According to Savills report, Covid-19 resulted in a notable surge in short-term leases. In H1 2020, the transaction volume of under one-year leases surpassed previous years’ annual volumes.
“Despite the heightened uncertainty of consumer tendency, the long-term outlook for the Polish industrial market remains very positive. Poland is likely to benefit, among other things, from the expected drive of global manufacturers to geographical diversification. New companies can be attracted to Poland by a prospect of lower logistics costs of serving other markets or a debut on our national market, which remains attractive on account of its size and outstanding performance of the e-commerce sector,” concludes Kamil Szymański, Savills.
The industrial market vacancy rate had fallen to 6.6% by the end of June 2020. Rental rates remained largely unchanged throughout Poland, with headline rents at €2.70–4.40/sqm/month for big-box facilities and at €5.25/sqm/month for small business units (SBUs).
