According to the Occupier Insight – Industrial and Warehouse Market in Poland Q3 2023, a report prepared by real estate advisory firm Newmark Polska, development and occupier activity is focused on Poland’s six core warehouse markets: Warsaw and its suburbs, Upper Silesia, Central Poland, Lower Silesia, Greater Poland and the newcomer - Pomerania. Nearly 89% of the construction activity is concentrated in these regions, which accounted for almost 84% of the total leasing volume for the first three quarters of 2023. Meanwhile, a slight rental correction is being observed in some locations and industrial parks.
At the end of the third quarter of 2023, Poland’s total warehouse and industrial stock was almost 31.1m2, an increase of 13.3% on the same time last year. Over 80% of the existing space is concentrated in Poland’s six core regions: Warsaw and its suburbs, Upper Silesia, Central Poland, Lower Silesia, Greater Poland, and Pomerania (whose total stock is likely to reach almost 2 million m2 of warehouse space in 2024).
New supply in the year to date amounted to more than 3.12 million m2, a decrease of 12.9% year-on-year. Only 527,000 m2 came on stream in the third quarter of 2023, down by over 55% on the same time last year and by 23.9% over the quarter. Newmark Polska estimates that 4 million m2 will be added to Poland’s total warehouse and industrial stock in the whole of 2023.
“Development activity has remained at a stable, moderate level since the beginning of the year, but started to gather pace towards the end of the third quarter. At the end of September, the volume of commenced warehouse and industrial space amounted to 2.5 million m2, up by 17.4% compared to Q2 2023, but down by nearly 38% year-on-year,” said Agnieszka Giermakowska, Research & Advisory Director, ESG Lead, Newmark Polska. “However, there is a noticeable trend of strong concentration of developers’ activity on six core warehouse markets, which account for nearly 89% of the space under construction. The Lesser Poland Voivodeship also stands out, where almost 167,000 m2 were underway at the end of Q3,” added the expert.
“An uptick in development activity in the third quarter of 2023 was accompanied by a slow recovery in leasing markets. Gross take-up for the period July-September 2023 surpassed 1.5 million m2, up by over 47% quarter-on-quarter and by more than 1% year-on-year. The first three quarters of 2023 saw nearly 3.75 million m2 leased, a decrease of 27.1% year-on-year,” said Jakub Kurek, Head of Industrial and Warehouse, Newmark Polska. “Occupier activity - similarly to development activity - also focused on the six core warehouse markets, which accounted for nearly 84% of the total leasing volume in the year to date,” added the expert.
The structure of demand in the first three quarters of 2023 was dominated by new leases and BTS projects, which accounted for 53% of all deals. Renegotiations and expansions made up 35% and 12% of the total take-up respectively. It is also worth noting that a total of 175,400 m2 was transacted in that period under shorter leases of up to one year. Another notable trend is the significant increase in expansions, which saw their share rise to even over 14% at the end of September 2023.
The third quarter witnessed two large BTS transactions for over 100,000m2 each. One saw a fashion retailer take 120,000m2 in Psary and the other - Raben sign a lease for 110,000m2 in CTPark Warsaw West,
Poland’s overall vacancy rate has been on an upward trajectory since the end of the fourth quarter of 2022. At the end of September 2023, it stood at 7.8%, up by 1.1 pp over the quarter and by 3.4 pp year-on-year. Vacant stock comprised over 2.4 million m2 in existing buildings and 1.3 million m2 in the pipeline. The largest quarterly increases in warehouse availability were in Lodzkie (up by over 185,500 m2) and Lubuskie (up by almost 88,000 m2).
In the third quarter of 2023, prime warehouse and industrial rents remained relatively unchanged from the previous quarter, but a slight rental correction was observed in some locations and industrial parks. The highest rental rates were in Warsaw (zone 1) and Krakow.
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