The Polish warehouse market in Q3 and Q4 2009 (PL)

According to the data of Cushman & Wakefield the third quarter of 2009 did not bring any sudden changes in the warehouse real estate market in Poland. Developers continued to exhibit a conservative approach to launching speculative developments. Only 57,000 m² of new warehouse space was delivered onto the market compared to the supply of nearly 400,000 m² in the corresponding period of 2008.

The warehouse space stock under construction is shrinking due to the lack of new developments. At the end of September there was only 150,000 m² of warehouse space under construction. In the corresponding period of the previous year such space amounted to approx. 1,250,000 m².

Tenants' sentiments improved slightly between July and September. Leases were signed for nearly 200,000 sq.m, which has been the highest figure this year. Nevertheless, the demand accounted for only 64% of the volume of space leased in the corresponding period of 2008. The most successful markets included the Warsaw region (53,000 sq.m of space leased), Central Poland (49,000 m²) and Upper Silesia (33,000 m²).

Despite the growing demand some of the warehouse space delivered onto the market this year has not been leased. However, for the first time in Q3 no increase was recorded in the vacancy rate. The share of vacant space in the total warehouse space stock amounted to 16.2% in September. This means that the vacancy rate remained at a similar level to that recorded in the previous quarter, but was higher by 5.8 percentage points than in Q3 2008. The vacant space totalled nearly 1 million m². In relation to the total stock the largest vacant space was in Szczecin (100%) and Upper Silesia (21.1%), whereas the least vacant space was on the Warsaw market (15.7%), in Poznañ (9.3%) and Tricity (1.4%). Given the large volume of vacant space, tenants continue to enjoy the opportunity of negotiating favourable lease terms.

Despite the improved economic fundamentals, the forecasts for Q4 2009 are not too optimistic. Developers are likely to launch only those schemes for which they will secure pre-leases. Approximately 20% of space under construction at the end of September is estimated to be completed. Consequently, only approx. 30,000 m² of new warehouse space will be delivered onto the market, which will be nearly half less than in the previous quarter.

Tomasz Olszewski, Partner, Head of Industrial Department, Cushman & Wakefield, said: "Tenants' activity remains at a similar level to that seen in the third quarter, but a slight increase in the lease volume is likely to occur by the end of the year. Consequently, both the vacancy rate and rental rates should not change much. The current trend is not expected to reverse by mid-2010."

Source: Cushman & Wakefield

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