We invite you to read the quarterly review of the Polish warehouse market prepared by the Consulting Department of Cushman & Wakefield Poland.
Overview
The second quarter of 2009 was a period of improving sentiment in the Polish warehouse real estate market, which was particularly evident on the demand side. Companies looking for rental space that had postponed their development plans due to the global economic situation returned to negotiations, finalizing them with lease agreements. On the other hand, the suspension of planned investments by developers means that the amount of space under construction and the volume of warehouses delivered to the market are decreasing. Due to the shrinking amount of attractive space for rent, the level of rents in prime locations has risen slightly; the general trend was the stabilization of rental costs.
Supply trends
In Q2 2009, the total stock of vacant warehouse space across Poland amounted to approx. 1 million sq m. The largest number of unleased buildings were located in locations such as: Szczecin, Chorzów, Błonie, Sochaczew and Mszczonów (Warsaw area), Stryków and Piotrków Trybunalski (Central Poland), as well as in Wrocław and its surroundings. In relation to the total existing stock, the vacancy rate was 16.5% nationwide, which effectively discourages developers from starting new speculative investments. At the same time, it should be remembered that in individual local markets, one or two larger transactions can completely change the amount of available space, and thus contribute to a sharp increase in rents in a given location.
Demand trends
In Q2 2009, the volume of lease transactions amounted to 174,800 sq m, which means an increase of 30% compared to the first quarter of this year. After a period of slowdown, several significant transactions were finalized, although tenants still showed great caution in choosing the scale and location of the space. About 92% of the total lease volume consisted of new contracts and space expansions, while lease renewals covered only 8% of the space leased in this quarter. The interest of potential tenants focused mainly on attractively located, top-class facilities in Wrocław, Warsaw, and Upper Silesia.
Forecast
Further reduction of new developer investments and the expected increase in real demand may significantly reduce the stock of attractive space for rent in the medium term. The decline in the vacancy rate expected in the coming quarters will likely translate into an increase in rents for the best warehouse space in the medium term. At the same time, it can be expected that secondary facilities will lower rental rates due to a lack of interest among tenants. We expect that attractive rents and shrinking stocks of space for rent will encourage developers to resume investment processes in the medium term.
Report in PDF format.