Industrial market in Poland in 2022
Logistics market starting to cool down after record-breaking years
Total European take-up reached 31.9 million m² in 2022, which was 6% down year-on-year, but still 25% above the five-year average. High construction costs, inflation, concerns regarding a slow economic rebound and limited supply are playing a crucial role in decision-making processes.
On the other hand, demand is still expected to remain positive in the short term, driven by tenants safeguarding against supply chain disruptions and upgrading occupied stock, combined with continued gradual e commerce expansion.
However, strong construction activity was maintained in Europe, with an impressive annual result (21 million m² delivered in 2022), while the availability of vacant space (vacancy rate) dropped to 3.2% due to sustained robust demand in the region. Moreover, the under-construction pipeline, noted a further decline of some 12% year-on-year, the most significant drop in the past decade, and stood at 22 million m² at the end of December 2022. As a consequence, occupiers faced a more limited choice in selected major markets.
Total occupier demand in Poland scored the second-best result in the market’s history, with a gross take-up of 6 million m². The softening of leasing activity was visible mostly in terms of new demand which saw a 20% decline, compared to 2021. However, the amount of renewed space set a new record, with over 1.6 million m² being the subject of rollovers.
The take-up structure in Q4 2022 was in line with what we observed in the first three quarters of the year, with the growth of logistics contractors and gradual softening of demand generated by the e‑commerce sector.
During 2022, the vacancy rate remained relatively stable, displaying only some slight increase in the second half of the year. In December it stood at 5.1%, translating into 1.5 million m² of available space.
The unprecedented levels of demand and space under construction, which were observed in 2021 and H1 2022, led to a record-breaking result of new completions. In 2022, Poland was responsible for as much as 20% of new logistics stock in Europe.
The Big Five markets together accounted for a 73% share in total new supply and were still driving market growth in 2022. The market’s centre of gravity is located in south-west Poland, with almost 25% of new supply being attributable to Wrocław and the Lubuskie region.
The under-construction pipeline was down to 3.6 million m² at the end of December 2022, a 25% decline on Q1 2022’s peak. Total space under construction was, however, still 33% higher compared to the five-year average.
Prime rental growth in Poland continued into Q4 2022. The average rent within the Big 5 markets rose 22% compared to the end of the previous year. Such dynamics is also the case for the wider European market, which with an average annual growth of 16%, is its highest level since the early 1990s.
As of Q3 2022, total industrial stock in Poland stood at 27.8 million m², with the Big Five markets accounting for some 78% share of this number.
In Q3 2022, the vacancy rate bounced back to above 5%. Record-high development activity (including speculative construction) observed in recent quarters resulted in 1.4 million m² of vacant space. This available space is distributed throughout numerous industrial parks across Poland which may not help in easing the supply/demand imbalance in the most desirable markets.
At the end of Q3 2022, the under-construction pipeline fell below 4 million m² for the first time since September 2021. Nonetheless, developers continued launching new investments, which totalled almost 1 million m² in Q3 2022 alone.
Rents maintained their upward trajectory in Q3 2022, although at a slightly lower pace. An increase in offered values, especially in terms of new developments, was up to 30% more than at the end of 2021. These offers, however, vary geographically and from park to park.
You will find more details on key I&L indicators on the polish market in the latest report.