Demand for warehouse space continues to grow

According to the latest “Occupier Insight Q1-Q3 2020”, a report prepared by real estate advisory firm Cresa Poland, the volume of transaction activity amounted to nearly 3.7 million sqm in the period from January to September 2020. Q3 2020 alone saw 1.3 million sqm transacted, up by 1% on the second quarter, up by 21% on the first quarter 2020 and up by 31% on the same period last year.

New lease agreements accounted for 48% of total take-up while renegotiations made up 28%. BTS leases and expansions accounted for 19% and 5%, respectively. Warehouse take-up predominantly came from retailers and 3PL (Third Party Logistics) companies that transacted more than half of gross demand in the surveyed period.

The largest transactions year-to-date were: the lease for 200 400 sqm in Panattoni BTS Świebodzin by an undisclosed occupier from the e-commerce sector in Q2 2020 and 67 500 sqm in 7R BTS Radzymin signed by a retailer in Q3 2020.

“Poland achieved another remarkable milestone by surpassing the 20 million sqm mark in relation to total modern stock in Q3. The supply and demand dynamics continue to be very strong which will add further depth to the Polish industrial market in terms of transaction volume, new developments and also product availability,” says Tom Listowski, Partner, Head of Industrial and Warehouse, Central and Eastern Europe, Cresa.

At the end of third quarter of 2020, Poland’s total industrial stock reached to 20.2 million sqm, up by 15% year-on-year, with the annual growth rate for the last five years averaging 16%.

Over 1.7 million sqm of warehouse and industrial space was delivered to the market in the first three quarters of 2020, with nearly 676 000 sqm delivered in Q3 2020. The most active development markets were Upper Silesia and Lower Silesia, with 410 000 sqm and 367 400 sqm of new space, respectively.

At the end of September, there was 1.5 million sqm under construction, of which around 444,000 sqm, or 29%, was speculative space. The Upper Silesia and Masovia noted the largest volumes of construction activity. The three largest projects underway were: Panattoni BTS Świebodzin, the extension of Prologis Park Janki, and Panattoni Park Gdańsk Airport.

“The vacancy rate stood at 8.5% at the end of Q3 2020, up by 2 pp on the same period last year and up by 1.5 pp on Q2 2020,” says Iga Kraśniewska, Research Manager, Research and Advisory, Cresa Polska. “The vacancy rate edged up at the end of Q3 2020 largely due to a higher base effect resulting from new supply that culminated in July-September,” adds the expert.

The highest vacancy rates were in Świętokrzyskie (20.6%) and Silesia (11%).