According to the latest report from global real estate services firm Cushman & Wakefield, leasing activity bounced back strongly on the Polish industrial market in Q3 2023. Meanwhile, development activity was largely driven by pre-lets and BTS projects, with rental rates remaining flat in most regions.
DEMAND: Growth driven by large deals
In the third quarter of 2023, total industrial gross take-up reached 1.5 million sq m - by far the best result for occupier activity this year. Positively, new leases accounted for 1.06 million sq m transacted, an increase of 54% quarter-to-quarter,
comments Damian Kołata, Partner, Head of Industrial & Logistics Agency Poland, Head of E-Commerce CEE, Cushman & Wakefield.
Logistics once again accounted for the largest share of net take-up for the period January-September 2023 - 37%. Other significant sectors powering the growth of the Polish warehouse market include manufacturing which is benefiting from nearshoring with a 16% share in the leasing volume, and e-commerce which included both e-retailers and logistics companies servicing e-commerce and generated 14% of the net take-up,
adds Damian Kołata.
SUPPLY: A significant increase in warehouse availability
In the third quarter alone, new supply reached 527,000 sq m, bringing this year’s total to 3.1 million sq m, of which around 35% remained vacant. High levels of speculative supply, including on the emerging submarkets, pushed vacancy rates up. As a result, total warehouse availability in third quarter of 2023 was more than 2.4 million sq m, double that posted at the same time last year,
explains Adrian Semaan, Senior Research Consultant, Industrial & Logistics Agency, Cushman & Wakefield.
In the third quarter of 2023, construction works began on close to 900,000 sq m of warehouse space. This represents a healthy level of development activity which is largely being driven by pre-lets and BTS projects. Although the share of speculative construction fell over the quarter from 61% to the current 53%, it still accounts for a significant proportion of the development pipeline on the markets with the greatest capacity to absorb warehouse space in Poland,
adds Adrian Semaan.
RENTS: Rental rates hold firm
Benefiting from increased warehouse availability, tenants are likely to have the upper hand in rent negotiations on some submarkets, including western and central Poland. Average rental rates are, however, unlikely to change much due to still high inflation and higher development financing costs,
concludes Damian Kołata.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in approximately 400 offices and 60 countries. In 2022, the firm reported revenue of $10.1 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), Environmental, Social and Governance (ESG) and more. For additional information, visit: www.cushmanwakefield.com.