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News Release

Warsaw

Poland's industrial market has record-breaking start to 2015

The busiest ever first quarter in terms of total demand. Developer activity remains buoyant and speculative projects are on the rise. Smaller markets gain in importance.


International advisory company JLL presents its Q1 2015 summary and the key trends for the coming months for Poland's industrial market.

Tomasz Olszewski, Head of Industrial CEE, JLL, said: "The industrial market maintained its momentum in Q1, with gross demand for warehouse, logistics and production space reaching nearly 585,000 sq m. This result was the busiest ever beginning to a year. Moreover, total modern warehouse stock hit the 9 million sq m threshold. Construction activity remains buoyant and nearly 593,000 sq m of space is currently at the development stage across Poland".

Demand

Gross demand for warehouse, logistics and production properties hit nearly 585,000 sq m in Q1. Occupier activity in Q1 was highest in Central Poland, where tenants leased or renewed a total of 141,000 sq m. Poznań and Upper Silesia were next with gross leased volumes of 92,000 sq m and 86,000 sq m respectively.

Jan Jakub Zombirt, Senior Research Analyst, JLL, commented: "Net demand – excluding lease renewals - in the first quarter stood at 380,000 sq m. Interestingly, a number of large lease transactions in Q1 were concluded in regions which are not considered typical industrial locations, including, i.a., Szczecin, Toruń or Podkarpacie. New leases totalling 107,000 sq m were signed outside of the five major markets, translating into a 28% share of total net take-up. This can be viewed as a very good result as the share of these less well-known regions of Poland's total stock is only 8%".

Interestingly, 50,000 sq m of the 70,000 sq m of new leases in Central Poland, were signed in Piotrków Trybunalski, the highest volume in years resulting in a substantial fall of available space in the area.

The largest lease transaction signed in Q1 involved Jysk, which leased 40,000 sq m in Piotrków's Logistic City.

Stock and supply

At the end of Q1 2015, total modern stock in Poland stood at 9,02 million sq m[1]. In terms of market share, more than a half of the existing stock is today in the hands of the four largest market players and their JV partners (Prologis, SEGRO, Logicor and Goodman).

New supply completed during the quarter was 298,000 sq m. The lion's share of the new space was found in the Poznań market (189,000 sq m), followed by the Warsaw Suburbs (28,000 sq m) and Tri-City (27,000 sq m).

Construction activity remains buoyant, with nearly 593,000 sq m currently at the development stage. The regions with the largest amounts of space now under construction are Wrocław (101,000 sq m), Upper Silesia (92,000 sq m) and Poznań (63,000 sq m). Today, construction activity is found in almost every region.

"We have observed a further increase in the share of speculative projects. At the end of Q1, projects which were underway but did not have a secured tenant totalled 215,000 sq m, which translates into 36% of the space currently under construction", Tomasz Olszewski added.

Vacancy rate

According to warehousefinder.pl, at the end of Q1, the vacancy rate stood at 7.3%, which was down from 9.8% in Q4 2014. Of the five major regions[2], the largest share of immediately available space was found in both Warsaw zones (13.9% in the Inner City and 10.3% in Warsaw Suburbs). The sharpest decrease in vacancy rate was seen in Central Poland, where, on the back of a few large deals in the Piotrków Trybunalski area, the region's rate dropped from 15.8% in the previous quarter to 6.1%.

Rents

A slight fall in headline rents was seen in both the Upper Silesia and Poznań markets, where they now range from €2.9 to €3.6 / sq m / month and €2.8 to €3.5 / sq m / month respectively. Rents in the remaining regions remained stable throughout Q1.



 

[1] JLL revised its warehouse stock data in Q1, which resulted in some changes to supply for selected industrial markets

[2] Warsaw, Upper Silesia, Poznań, Central Poland and Wrocław