Advisory firm JLL summarises the situation on the Polish industrial market at the end of Q1 2016.
Tomasz Mika, Head of Industrial Poland, JLL, says: “We witnessed a particularly strong opening to the year on the Polish industrial market. In Q1 2016, total demand reached 680,000m², which was the best first quarter result in the last decade and augurs well for the remainder of the year. In addition, Poland’s industrial and warehouse stock crossed the 10 million m² threshold in Q1. This makes Poland the ninth largest market in Europe”.
In Q1 2016, the highest occupier activity was recorded in the Warsaw Suburbs, where tenants leased a total of 184,000m², followed by Upper Silesia (142,000m²) and Poznań (123,500m²). The biggest lease agreement was signed by Kaufland (45,000m²) in Panattoni Park Bydgoszcz.
Supply
By the end of Q1 2016, Poland’s total industrial and warehouse stock was 10.37 million m². 418,000 m² of new space was delivered to market in the first three months of the year. The majority of new projects were completed in established locations such as Warsaw Suburbs (137,00m²), Upper Silesia (87,00m²) and Central Poland (85,00m²).
“Developer activity continues to be strong in the market. Currently, there is 640,000m² of space under construction, which places the industrial market behind the office segment but ahead of the shopping centre sector. The largest volume of warehouse space under development is in Poznań - 160,00m², followed by Warsaw Suburbs - 108,000m² and Central Poland - 106,00m²”, comments Przemysław Ciupek, Senior Research Analyst at JLL.
Speculative projects are on the rise.
“54% of industrial space currently being developed is on a speculative basis - without binding lease agreements. In comparison, by the end of Q1 2014 this total was a mere 5.5%. This clearly confirms investor trust and confidence in the growth potential of the Polish industrial market”, adds Tomasz Mika.
Vacancy rate
At the end of Q1 2016, the vacancy rate stood at 6.7%, which represented a small increase on Q4 2015's 6.2%. The highest vacancy rate is in the Warsaw Suburbs (11.8% of overall stock). Smaller markets, such as Szczecin and Opole have a 0% vacancy rate.
Rents
According to warehousefinder.pl, prime headline rents have remained stable throughout Q1 2016 with the most expensive industrial space still being recorded in Warsaw Inner City (€4.1 - €5.3 / m² / month) and Kraków (€3.8 - €4.5 / sq m / month). The lowest rents for big box units are in Central Poland and range from €2.6 to €3.2 / m² / month. Nevertheless, it is worth underlining that the above values do not include owners’ incentives and should be treated as a basis for further negotiations.
Source: JLL
