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Poland provides stability for region

8th October 2012
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Warehouse completion volumes are rising fast in Poland, helping to support the wider region

Some 305,000 sqm of logistics space was delivered in Poland in H1, 2012. Pictured is Prologis Park Wroc³aw III, which was delivered in 2011
Courtesy of CBRE

The warehouse market in Poland has picked up the pace so far in 2012 and is helping to prop up the wider Central European logistics market, according to industry experts.

In the first half of 2012, some 305,000 sqm of warehouse space was completed in Poland – double the volume delivered in the corresponding period of last year, and more than twice as much as in H1 2010, according to a report by CBRE.

Most of the warehouse space in Poland is being built in the Upper Silesia region and in the city of Poznań.

“At present approximately 251,000 sqm of modern warehouse space is under construction in Poland. Most of the space is built in Upper Silesia and in Poznań,” Colliers International wrote in a recent report.

Cushman & Wakefield estimated that some 370,000 sqm of warehouse space was completed in Central Europe in H1 2012. The combined value of the space is put at €170 million. As most of this warehouse space is in Poland, experts say the country is one of the biggest stabilizing factors in the Central European warehouse market.

Stabilizing influence

“The biggest warehouse space transactions have been noted in Poland,” said Ferdinand Hlobil, head of the Central European Industrial Department at Cushman & Wakefield. “Poland has been [one of the] main stabilizers in the region,” he added.

Mr Hlobil said that regardless of the ongoing economic crisis in Europe, the industrial real estate market in Central Europe is in relatively good shape. He added that developers’ and investors’ plans to continue their activity indicates that there is a possibility that the sector could see satisfactory profits.

The number of warehouse transactions in Poland has nevertheless been low compared to the volume seen in the office and retail markets, due to the limited availability of high-quality schemes.

In Q1 2012, just one investment transaction was finalized in the logistics sector, with Hines purchasing a portfolio of Prologis projects for E96 million. In Q2, two investment deals were closed: Ideal Idea Park II in Warsaw was purchased by BPH FIZ and Goodman sold a built-to-suit project in Legnica to Case Tech.

Output gap

The Polish warehouse space market is facing a serious output gap, which means developers will engage more in speculative projects, Jones Lang LaSalle said in a report.

However, Tomasz Olszewski, head of the industrial agency for the CEE region at Jones Lang LaSalle, said speculative projects won’t be implemented on a large scale, and will only enter the market in H2 2013. He explained that the small supply of speculatively built facilities is primarily the result of restrictive bank policies. Lenders, he said, are reluctant to provide loans for projects which have not secured lease agreements.

According to Colliers International, the outlook for the industrial market for the next few months is optimistic.

“Rising demand for modern warehouse space results in the decrease of vacant space levels in certain markets which may increase rental rates. Almost all projects under construction are already leased. However, developers still have a significant amount of land prepared for warehouse projects that will be able to satisfy the demand of prospective tenants,” said Maciej Chmielewski, a partner in the industrial and logistics department at Colliers International.

From Warsaw Business Journal by Izabela Depczyk

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