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Warsaw

Wrocław region fast approaching 1 million sq m warehouse space mark

The 5th largest warehouse market in Poland specializes in companies providing cross-border logistics services; in 2014 the total warehouse space volume in Wrocław will break the 1 million sq m barrier


Warsaw, 28 March 2014 – According to the analyses by international advisory company JLL, at the end of 2013, there was 780,000 sq m of modern warehouse stock in the Wrocław region, making it the fifth largest warehouse market in Poland, after Warsaw, Upper Silesia, Poznań and Central Poland.
 
The key elements driving demand for warehouse space in the Wrocław region are its strategic location, the sizeable and relatively affluent local market, and well-developed transport infrastructure. Three Special Economic Zones with numerous investors representing FMCG, automotive, aviation and manufacturing industries operate in the region.
Michał Śniadała, Senior Consultant, Industrial Agency, JLL, commented: “Wrocław's location in the heart of Central Europe, with its proximity to Germany and the Czech Republic, makes Wrocław an increasingly popular warehouse location for companies providing cross-border logistics services. This has been fostered by the gradual development of the road network. Today, the capital of Lower Silesia enjoys convenient motorway connections with Germany and Upper Silesia . However, the future looks even brighter with two projects, the S8 express road, connecting Wrocław with Łódź and Warsaw due to be completed this year and the S5 towards Poznań, whose construction is planned in the next few years already influencing the market in northern Wrocław. In addition, the planned S3 expressway between Legnica and the Czech border will further increase the international accessibility of the region.

1 million sq m of warehouse stock in 2014
Data from www.warehousefinder.pl shows that some 117,000 sq m of space was delivered to the market during 2013, of which 36,000 sq m was completed in Prologis Park Wrocław V, and another 32,000 sq m built by Panattoni as a BTS project for Lear in Legnica.
When the projects currently under construction (259,000 sq m) are completed, the supply in the Wrocław area will hit the 1 million  sq m threshold, meaning existing stock will have doubled in a five-year period.

Record-high demand generated by Amazon
The selection of Wrocław as the location for two of Amazon’s buildings with a joint floor space of 224,000 sq m confirms the attractiveness of the region and its logistics nearshoring potential for companies from Western Europe. This will result in a sharp increase of supply on the market, and is already resulting in a record-high demand, which stood at 415,000 sq m in 2013.
In 2013, new transactions and lease expansions alone, totalled 342,000 sq m. However, one should bear in mind that a large proportion of this demand was attributable to Amazon. Against this backdrop, even assuming there are good economic prospects, the 2013 demand level may prove difficult to sustain in the next few years.
Vacancy rates
For most of 2013, the vacancy rate was stable in the Wrocław market, fluctuating between 5 and 6%. However, the last quarter brought a sharp increase in availability, with the bankruptcy of Fagor, whose vacated units drove the vacancy rate up to 11.7%.
Rents
At the end of 2013, headline rents for a big box unit in Wrocław ranged from €3.0 to €3.8 / sq m / month