According to the latest report from global real estate services firm Cushman & Wakefield, 2023 saw the second highest supply level and the third highest take-up figure in the history of the Polish industrial market. The sector continues to enjoy strong fundamentals supporting its steady growth despite the rapidly changing macroeconomic environment.
DEMAND: LEASING ACTIVITY GAINED MOMENTUM IN H2 2023
Last year’s leasing activity reached nearly 5.6 million sq m - the third highest result since records began. Net take-up comprising new leases and expansions accounted for 60% of the total leasing volume while renewals made up the remaining 40%. Leasing activity accelerated particularly in the second half of 2023, which is positive news and a sign of improving occupier sentiment. Nearly 3.4 million sq m was transacted between July and December, up by more than 50% over the previous six months,
comments Damian Kołata, Partner, Head of Industrial & Logistics Agency Poland, Head of E-Commerce CEE, Cushman & Wakefield.
In times of global turmoil, forecasts and assumptions of any kind are fraught with considerable uncertainty. The industrial sector has been expanding at a double-digit growth rate for the last 10 years, but its growth is likely to tail off in the next decade. It is worth underscoring, however, that it continues to grow, underpinned by Poland’s strong economic fundamentals and global trends of e-commerce expansion, supply chain reorganisation and energy transition, which bodes well for the future,
adds Damian Kołata.
SUPPLY: WAREHOUSE AVAILABILITY IMPROVED IN 2023
New supply for the fourth quarter reached 580,000 sq m, bringing last year’s total to 3.7 million sq m - the second best result in the history of the industrial sector in Poland. High levels of new completions improved warehouse availability which was 2.3 million sq m at the end of last year, double that posted at the same time a year ago,
comments Adrian Semaan, Senior Research Consultant, Cushman & Wakefield.
In 2024, Poland’s total warehouse stock is expected to surpass the 34 million sq m mark, while Warsaw - with nearly 7 million sq m of warehouse space - will strengthen its position as the leading market and increase its lead over the runner-up Silesia by 20%. Lower Silesia and Łódź are likely to have 5 million sq m each in the near future,
adds Adrian Semaan.
RENTAL AND VACANCY RATES HOLD FIRM
The still healthy supply-demand balance keeps rental rates stable, further aided by easing inflationary pressure and more predictable construction costs. It is worth noting that developers curtailed speculative activity during the second half of the year, in which they commenced construction work on 580,000 sq m of projects without pre-lets - a 40% decrease compared with the first six months. This is expected to push the average vacancy rate down by the end of this year,
concludes Damian Kołata.