According to Cushman & Wakefield data, the third quarter of 2009 did not bring drastic changes to the warehouse real estate market in Poland. Developers maintained a cautious approach to starting speculative investments. Only 57,000 sq m of new warehouse space entered the market, compared to a supply reaching 400,000 sq m in the same period of the previous year. Due to the lack of new investments, the stock of warehouse space under construction is slowly shrinking. At the end of September, construction work was underway on only 150,000 sq m of warehouses. In the corresponding period of the previous year, the space under construction amounted to approx. 1,250,000 sq m.
Between July and September, there was a slight improvement in sentiment among tenants. Agreements were signed for nearly 200,000 sq m of space. This is the best result this year, although the recorded demand represents only 64% of the volume of space leased in the same period of the previous year. The most popular markets include the Warsaw region (53,000 sq m of leased space), Central Poland (49,000 sq m), and Upper Silesia (33,000 sq m).
Despite growing demand, some of the warehouse space delivered to the market this year has not found tenants. However, in the third quarter, for the first time, there was no increase in the volume of vacant space. The share of vacant space in total warehouse stock was 16.2% in September. This means that the vacancy rate remained at a level similar to that recorded in the previous quarter, but at the same time 5.8 percentage points higher compared to the third quarter of 2008. The total area remaining without tenants is almost one million sq m. In relation to total stock, the most vacant space is in Szczecin (100%) and Upper Silesia (21.1%), and the least in the Warsaw market (15.7%), Poznań (9.3%), and the Tri-City (1.4%). Due to the high volume of vacant space, tenants still have the opportunity to negotiate favorable lease terms.
Despite the improvement in economic indicators, forecasts for the fourth quarter of 2009 are not optimistic. Developers will likely only start projects that are secured in advance with pre-lease agreements. According to estimates, about 20% of the space under construction at the end of September will be completed. As a result, only about 30,000 sq m of new warehouse space will enter the market, which is nearly half as much as in the previous quarter.
Tomasz Olszewski, Partner, Head of Industrial and Warehouse Department at Cushman & Wakefield, stated:
– Tenant activity will remain at a level similar to that observed in the third quarter, although a slight increase in leasing volume is possible towards the end of the year. As a result, both the vacancy rate and rent levels should not change significantly. A reversal of the current trend is expected only in mid-2010.