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News Release

Warsaw

No major changes on the Polish industrial market


Occupier caution persists and new development remains constrained. Although the Warsaw Suburbs remain the most sought-after location, it is Wrocław that currently enjoys most construction activity, according to Jones Lang LaSalle Industrial Agency experts

Warsaw, 26 April, 2013 r. – Jones Lang LaSalle Industrial Agency presents summary of the industrial market Poland, after Q1 2013. Set out below are the key findings from the research paper:

Demand: Gross demand for warehouse space in Q1 2013 totalled 295,000 sq m, which is a 19% decrease as compared to the previous quarter. New deals and space extensions accounted for 58% of gross take-up. Net take-up stood at 172,000 sq m, down by 14% on Q4 2012. The largest deals during Q1 included Żabka (a lease renewal and extension; SEGRO Industrial Park Tychy; 19,000 + 2,500 sq m), Spedimex (a lease renewal; Panattoni Park Stryków; 17,000 sq m) and Volkswagen (new lease, ProLogis Park Poznań II; 16,000 sq m). Logistics operators once again contributed to the largest portion (48%) of new demand, followed by automotive category (22%), light production (9%) and retailers (9%). 

The Warsaw Suburbs proved to be the most sought-after location accounting for over 35.4% of net demand, with Wrocław being second with 15.3% of the total. However, if one includes lease renewals it was Upper Silesia came second with total leased volume of 59,000 sq m.

Supply: In Q1, the market expanded by an additional 86,000 sq m in 7 new projects. The largest deliverable was a BTS project of 32,000 sq m completed by Panattoni for Lear in Legnica. Other noteworthy completions include the first phase (14,000 sq m) of Goodman’s large port centric logistics complex (14,000 sq m, Pomorskie Centrum Logistyczne in Gdańsk) and the BTS project by Panattoni for Syncreon (11,000 sq m; Żary).     
With almost 2 million sq m of stock, the Warsaw Suburbs remain the largest regional market in Poland, followed by Upper Silesia (1.38 million sq m) and Poznań (1.01 million sq m). The Wrocław region was the largest construction site with 50,000 sq m of warehouse floor space delivered during Q1. Amongst developers, Panattoni was the most active, having delivered almost 79,000 sq m, with Goodman coming second with 14,000 sq m completed during Q1 2013.  
In total, more than 163,000 sq m of warehouse space is under construction throughout the country (down by 26% on Q4 2012), of which 17% is built speculatively, and 83% on the pre-lease basis. 42,000 sq m remains in the construction stage in the Wrocław area, followed by Upper Silesia and the Warsaw Suburbs, with more than 38,000 sq m and 36,000 sq m respectively. The largest share of speculative (i.e. not secured with any binding lease agreements) developments is underway in Warsaw Inner City (69%) and Szczecin (61%).

Vacancy rates: The overall vacancy rate in the market in Q1 2013 stood at 10.2% and were relatively stable as compared to Q4 2012, when it totaled 10.1%. The largest increase in immediately available space took place in Central Poland (an increase from 12.3% in Q4 to 16.5% in Q1). Decreases of the vacancy rate were recorded in Warsaw Suburbs (current vacancy at 13.3%), Wrocław (6.5%) and Poznań (3%), where the vacant volume will most likely shrink further, due to the lack of any construction activity.

Rents: In most markets (except Poznań) the headline rental bands remained stable. Effective rents, (which include incentives such as rent-free periods) followed the trend in most markets with the exception of Central Poland, Wrocław and aforementioned Poznań.

Inner city locations typical for SBU (Small Business Units) developments feature the highest effective rents, ranging between €2.75 to 3.7/ sq m/ month in Łódź and €3.6 to 5.1/ sq m/ month in Warsaw. Big box rents are most attractive in Central Poland (€2.1 to 3.0/ sq m/ month) and highest in markets that feature limited available supply: Kraków (€3.3 to 4.0/ sq m/ month) and Upper Silesia (€2.45 to 3.4/ sq m/ month).

Tomasz Mika, Head of Industrial Agency, Jones Lang LaSalle, summarises: “In Q1 of 2013 the market continued to be relatively stable. The overall economic climate and related cautious attitude of both tenants and developers had influence on the demand level and limited speculative construction. We expect, however, that Q2 will bring an increase in construction activity, as the construction season is to a significant extent weather driven, and this year’s prolonged winter may induce some developers to catch up with the planned work. What is more, we observe a growing number of inquiries from potential tenants, that may indicate a tipping point and be a sign of the changes on the industrial market in the second half of the year.