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News Release

Warsaw

Polish industrial market breaks the 10 million sq m barrier

Excellent opening to the year in terms of industrial gross take-up – 680,000 sq m of warehouse space leased in Q1. 40,000 sq m of space under construction with 54% being developed on a speculative basis.


Advisory firm JLL summarizes the situation on the Polish industrial market at the end of Q1 2016.

Tomasz Mika, Head of Industrial Poland, JLL, says: "We witnessed a particularly strong opening to the year on the Polish industrial market. In Q1 2016, total demand reached 680,000 sq m, which was the best first quarter result in the last decade and augurs well for the remainder of the year. In addition, Poland's industrial and warehouse stock crossed the 10 million sq m threshold in Q1. This makes Poland the ninth largest market in Europe".

In Q1 2016, the highest occupier activity was recorded in the Warsaw Suburbs, where tenants leased a total of 184,000 sq m, followed by Upper Silesia (142,000 sq m) and Poznań (123,500 sq m). The biggest lease agreement was signed by Kaufland (45,000 sq m) in Panattoni Park Bydgoszcz.

Key lease agreements in Q1 2016

TenantParkDeal typeSpace (sq m)
KauflandPanattoni Park BydgoszczNew deal45,000
CLIP LogisticCLIP PoznańNew deal25,000
AvonPanattoni Park GarwolinRenewal 25,000
Saint GobainPanattoni Park Sosnowiec IIExtension22,400

Source: JLL, warehousefinder.pl, Q1 2016

Supply

By the end of Q1 2016, Poland's total industrial and warehouse stock was 10.37 million sq m. 418,000 sq m of new space was delivered to market in the first three months of the year. The majority of new projects were completed in established locations such as Warsaw Suburbs (137,000 sq m), Upper Silesia (87,000 sq m) and Central Poland (85,000 sq m).

"Developer activity continues to be strong in the market. Currently, there is 640,000 sq m of space under construction, which places the industrial market behind the office segment but ahead of the shopping centre sector. The largest volume of warehouse space under development is in Poznań - 160,00 sq m, followed by Warsaw Suburbs - 108,000 sq m and Central Poland - 106,000 sq m", comments Przemysław Ciupek, Senior Research Analyst at JLL.

Speculative projects are on the rise.

"54% of industrial space currently being developed is on a speculative basis - without binding lease agreements. In comparison, by the end of Q1 2014 this total was a mere 5.5%. This clearly confirms investor trust and confidence in the growth potential of the Polish industrial market", adds Tomasz Mika.

Vacancy rate

At the end of Q1 2016, the vacancy rate stood at 6.7%, which represented a small increase on Q4 2015's 6.2%. The highest vacancy rate is in the Warsaw Suburbs (11.8% of overall stock). Smaller markets, such as Szczecin and Opole have a 0% vacancy rate.

Rents

According to warehousefinder.pl, prime headline rents have remained stable throughout Q1 2016 with the most expensive industrial space still being recorded in Warsaw Inner City (€4.1 - €5.3 / sq m / month) and Kraków (€3.8 - €4.5 / sq m / month). The lowest rents for big box units are in Central Poland and range from €2.6 to €3.2 / sq m / month. Nevertheless, it is worth underlining that the above values do not include owners' incentives and should be treated as a basis for further negotiations.