The total supply of warehouses in Poland is estimated at a level of 16-17 million m2 with modern warehouse space constituting only about 15%. The warehouse and logistics centres currently being built are high storage facilities (with a height of at least 8-9 metres); equipped with fibre-optic telecommunications systems and high class fire security. Air-conditioning which regulates temperature and humidity level is becoming standard. The dominance of the Warsaw warehouse market over the rest of the country is diminishing more and more. Warsaw’s share in the market has already dropped below 70%, whereas at the start of 2004 it was about 85%, but in the case of modern warehouses it is only around 55%. The leading positions among the regional centres are held by: Poznań, Wrocław, the Silesia Region and “the golden triangle” (the region between Łódź, Piotrków Trybunalski and Stryków). This is mainly due to the more intensive development of these regional markets, their strategic location and relatively well-developed road structure compared with the rest of the country.
It is anticipated that in the nearest future the Tricity will join the above-mentioned regions in connection with the construction of a new DCT container terminal in the Gdańsk Port, which began in 2005 and the development of the A-1 Motorway from Gdańsk to the south of the country. Thanks to the reviving trade with the East, the following cities have a considerable chance of attracting developers wishing to build logistic centres: Białystok, Lublin, Rzeszów, Biała Podlaska, and Suwałki/Ełk.
The cities in the eastern part of the country may become a warehouse base for Russia, Belarus and Ukraine, but only if – which may seem quite paradoxical – the eastern border of Poland remains the eastern border of the European Union for a long time.
Otherwise, the developers will probably go further east and locate their new facilities there. Also Kraków may benefit from new warehousing investments due to the well developed local consumer market accompanied by the lack of modern warehousing space; Bydgoszcz/Toruń in connection with the construction of the A1 Motorway; and Szczecin due to the vicinity of the German border.
The Polish warehouse market has been dominated by international development companies, including the market leader – ProLogis, followed by AIG/Lincoln, City Point, Bel Properties and Metropol, which together hold over 50% of the market. The remaining players are: Heitman, Menard Doswell and Europa Distribution Centre. Competition on the market is very high, and we can expect that it will become even stronger as Panatonni and the Immo Industry Group have shown interest in the Polish market.
Warehouse rents in Poland are relatively low, even compared with other Central and Eastern Europe countries. On the Warsaw market the rents vary between EUR 3-6/m2. Rents in the regional cities are at EUR 3-4/m2. The above-mentioned rates apply to modern warehousing space. The owners of old warehouses which are not adapted to current market standards may get a maximum of EUR 2.5-3.5/m2 per month.
Market trends
- Some areas in Central and Eastern Europe may constitute a threat to the development of the warehouse market in Poland (this mainly relates to the environs of Bern, Ostrava, Prague, Bratislava and Kosice). Currently, rents in Poland are competitive (EUR 1-2/m2 lower), but Poland’s disadvantage is that its network of motorways and dual carriageways is less developed;
- Bearing in mind the growing expectations of tenants who are more and more willing to locate their stock in modern logistic centres and the growing inflow of direct investments, which are considered one of the main stimulators of developers’ activity, it should be expected that the growth dynamics of the new warehouse space will remain high in the coming years;
- In the next few years, the warehousing facilities’ map in Poland will change. Apart from the already strong Poznań, Wrocław, Upper Silesia and Central Poland areas, the following cities are most likely to benefit from the change: the Tricity, Bydgoszcz/Toruń and Kraków. Also Szczecin and cities in eastern Poland have a chance;
- Sources close to this element of the market indicate that the developers currently operating in Poland are forming their “land banks” by buying up land next to the existing or planned communication routes in strategic regions of Poland and they will surely closely observe the development of the situation on the Polish warehouse market. Some developers will probably stick to the traditional development of their offer, based on the “built-to-suit” concept, and the more courageous ones will build speculatively;
- Bearing in mind the fact that a considerable number of the currently executed or planned warehousing investments are typically speculative, it should be expected that the short-term increases in vacancy which occurred in 2005 may become more and more frequent.
