ARTICLES LABELLED WITH TAG Axi Immo

As of the end of 2023, Warsaw remains the leader in Poland’s office market, but the 61,000 sqm (-74% y/y) completed in the last 12 months was one of the lowest results in its history, says Axi Immo. The developer’s lower activity period seems to be over, as by 2026, some 150,000 sqm of new supply should be delivered each year. After a very good 2022, 2023 was not much worse. Between January and December 2023, tenants signed contracts for about 750,000 sqm, meaning the total volume of transactions was slightly 13% lower than the year before. Continued low supply in 2023 and stabilizing demand reduced the vacancy to 647,000 sqm (-11% y/y).

Poland’s industrial sector slowed in 2023, but the market hopes to rebound in 2024. After the peak of take-up and supply in the so-called COVID period falling in 2020-2022, the logistics and manufacturing market has returned in many values to those observed in 2018-2019, says Axi Immo. 

Axi Immo has presented six key trends on the Polish office market with a presentation of estimates for the sector at the end of 2023.

After nearly 16 years, the site of the unsuccessful “Żubr” housing estate project in Podłęże near Kraków is back in use and changing its purpose. The new plan for the site is an international logistics service centre. MCG EastBridge, a new company within the Maszoński Logistic Group, has already begun operations in the region, Axi Immo reports.

The Polish industrial and logistics market is transitional between economic shifts. Demand for warehouse space declined primarily in the first half of 2023, with a resurgence in Q3, resulting in aggregate demand for the first three quarters of this year of 3.75 million sqm (-25% y/y, Q1-Q3 2022). Higher investment financing costs are affecting the volume of space under construction, with developers developing 2.5 million sqm at the end of September 2023 (-36% y/y). It also impacts the volume of space delivered, which amounted to 3.12 million sqm from January to the end of September (-13% y/y Q1-Q3 2022), says Axi Immo. 

From January to the end of September 2023, the total demand for modern office space in Warsaw amounted to nearly 0.5 million sqm. Tenants often choose two contract options, i.e., they relocate to a new space or decide to renegotiate existing terms. The vacancy rate is decreasing, standing at 10.6% at the end of September 2023. On the supply side, developers delivered just over 20,000 sqm to the capital's office market in January-September 2023, indicating a supply gap period in Warsaw. Nevertheless, more than 240,000 sqm is under construction, most of which will be completed by the end of 2025, says Axi Immo. 

AXI IMMO, an advisory firm operating in the Polish commercial real estate market, and British property consultancy Carter Jonas have formed an alliance, with both firms aiming to strengthen their cross-border activities.

According to AXI Immo, more challenging economic situation and a ‘wait and see’ approach adopted by market players have been the key factors affecting the Polish industrial real estate sector in H1 2023. Gross take-up amounted to 2.24 million sq ]m (-39% y/y) between January and June. A soft patch was also visible on the supply side. Although a relatively large amount of space was added to the market in H1 2023 (2.6 million sqm, marking a 9% y/y increase) and total stock increased to 30.6 million sq \m, there was only 2.13 million sqm under construction as at the end of June 2023 – 50% less compared to a year earlier. The vacancy rate climbed to 6.7% at the end of Q2, marking a 3.3 p.p. increase on Q2 2022.

MCG EastBridge, part of the Maszoński Group's portfolio is growing. Following a record-breaking deal on the Kraków warehouse market in Q1 2023 for nearly 37,000 sqm at GLP Kraków III Logistics Centre, the company decided to expand by more than 19,000 sqm. Under the signed agreements, MCG EastBridge will occupy a total of 56,200 sqm and will be a single occupier in the development, which is being built in the Niepołomice Investment Zone near Kraków. The two-stage lease is the largest signed transaction in the Polish warehouse market in the first half of 2023. In both cases, MCG EastBridge was represented by AXI IMMO.

Despite a supply gap and a low level of new completions (18,700 sqm in H1), there is a lot of optimism in the capital’s office market. Over 230,000 sqm is scheduled to be delivered in the next three years, which will significantly increase the amount of office space available to let. On the demand side meanwhile, we observe a relatively high occupier demand, whereby 2/3 of all agreements signed in H1 were new leases. AXI IMMO presents market data for the first half of 2023.