The Polish warehouse market is experiencing an unprecedented boom. In the first half of 2021, the take-up of logistics space in Poland exceeded 3 million square meters for the first time in history and was higher than in the United Kingdom, France or Spain.
According to Savills, total take-up in Poland for H1 2021 exceeded a record-breaking 3 million sqm and was higher than in France (1.7 million sqm), the UK (2.1 million sqm) or Spain (1.1 million sqm). In the last 12 months, Poland recorded an impressive volume of over 6.2 million sqm warehouse space that had been leased.
This data is also confirmed by advisory firm JLL. „The Polish industrial market is continuing its high growth rate and is setting new demand records. In the first half of 2021 companies leased 3.15 million sqm, over 40% more than in the same period of 2020. Net take-up, including only new leases and expansions, reached 2.3 million sqm – the fourth-strongest result in Europe after Germany, the UK and the Netherlands. Interestingly, the average H1 increase in new take-up for Poland was 77% above the 5-year average. In Europe as a whole, this ratio was 44%”, Tomasz Mika, Head of Industrial Leasing in the Polish branch of JLL told Property Forum.
The result of Poland is especially striking when compared to the UK, which is one of the largest warehouse markets in Europe. In H1 2021, only about 2 million sqm of warehouse space was leased in the United Kingdom, which is inhabited by 66.5 million people (vs. 38 million in Poland). In recent years, take up in Poland was usually slightly larger than on the British isles, but only by a small margin – last time this advantage was so visible in 2017 (4.3 million in Poland sqm vs. 2.5 million in the UK.)
The good results of the Polish warehouse market are no surprise – its already rapid development has been further boosted by the pandemic turmoil and increasing demand in the e-commerce sector. More and more space is leased by logistics operators, courier companies and retail chains. A significant part of new projects is initiated in the segment of city warehouses for last-mile purposes. In Warsaw, for example, a quarter of the space under construction is located within the city's administrative boundaries.
E-commerce in Poland is still in its infancy – in 2019, just before the pandemic, its net worth was just about €12 billion, a rather meagre result, when compared to European leaders: UK (€200 billion), Germany (€105 billion) and France (€97 billion). But it is catching up pretty fast – according to PwC, only in 2020 it has grown by 35% and another 12% increase is predicted for 2021. The development of the warehouse market in Poland is also boosted by the constantly-improving highway network, built with the use of EU development funds.
Apart from the fast-growing domestic e-commerce sector and local consumption recovering after the pandemic, the Polish warehouse market is also driven by demand from abroad. The country’s strategic location within Europe and attractive rents, as well as the relative ease of securing land for warehouse developments, encourage a number of major international players, like for example Amazon or Zalando to establish their European distribution hubs in Poland. We can also observe increasing nearshoring trends in Poland – after the pandemic has severed many global supply chains, numerous companies are moving their production from the Far East region to closer locations, like CEE countries. It is a continuation of a process started by Brexit – since 2017, we have been watching a relocation of warehouses and manufacturing hubs from the UK to mainland locations, like Poland or the Czech Republic, both offering inexpensive, qualified workforce, modern facilities and decent road infrastructure.
A new supply of 1.14 million sqm in H1 2021 is also a record for the Polish industrial market. But even more warehouse space is being built at the moment. „Supply under construction exceeded 3 million sqm for the first time in Poland’s industrial market. Poland currently ranks second in Europe, after Germany, in terms of development activity. Confidence and optimism can also be seen in the share of speculatively built space – approximately 40% of the warehouses under construction are not secured by lease agreements”, explains Tomasz Mika of JLL.
