The Polish warehouse market observed a rise in transaction volume in H1 2013 of around 3 percent compared with the second half of 2012 and it is showing signs of stability, according to a recent report by Cushman & Wakefield.
Although at the same time the market saw a decrease in new warehouse completions by 30 percent, the occupancy market boasted improved results. As of the end of June 2013 total modern warehouse stock reached 7,678,000 sqm, a rise of 2 percent compared with the end of 2012.
The Port of Gdynia plans major modernization
Courtesy of Port Gdynia
The highest concentration of warehouse space in Poland is in the Warsaw region and in several regional markets. With 2,728,000 sqm of warehouse space, Warsaw together with its suburbs accounts for 36 percent of the country’s total stock. Large regional warehouse destinations of Upper Silesia, Poznań, Central Poland and Wrocław account for a total of 4,950,000 sqm. Improving road infrastructure has also facilitated the development of other regions, in particular Tri-City, Kraków, Rzeszow, Toruń, Szczecin and Lublin.
Modern warehouse take-up in H1 of 2013 stood at 868,000 sqm, reflecting a significant rise compared with the 660,000 sqm transacted in the same period of 2012. Approximately 500,000 sqm of take-up was recorded in the second quarter of 2013 alone.
Occupiers’ interest focused mostly on warehouses in the Warsaw region (33 percent of total take-up). Other regions with a significant share included: Wrocław (21 percent), Upper Silesia (20 percent) and Central Poland (12 percent).
New lease agreements accounted for 58 percent of total take-up, lease extensions made up 31 percent, and lease expansions around 11 percent.
Demand for warehouse space came predominantly from logistics operators and distribution companies (37 percent). A significant share of take-up also come from retail chains (13 percent), the automotive industry (10 percent) and light production (8 percent). The steady growth of e-commerce is also a driver of leasing activity, which is projected to expand quickly in the coming years.
Development activity slowed in the first half of 2013. Some 148,000 sqm came onto the market, with the Wrocław region accounting for the largest share in total volume (41 percent). Central Poland made up 13 percent, Upper Silesia 12 percent, Warsaw and Tri-City 10 percent each and Poznań 9 percent.
Source: Cushman & Wakefield
At the end of the first half of 2013 around 260,000 sqm of warehouse space was under construction, 20 percent more than in December 2012. Most of these projects were on a built-to-suit basis, which are specifically constructed to meet the design, location and technical specifications of a given occupier. The highest concentration of modern warehouse space under construction is in Wrocław (33 percent), Poznań (19 percent) Warsaw (16 percent) and Upper Silesia (13 percent).
Seaports ready to grow
Large warehouse space is currently planned on the Nabrzeże Bułgarskie part of Gdynia waterfront. Its owner, Port of Gdynia Authority (Zarząd Morski Portu Gdynia, ZMPG), wants to create a new loading and logistics area in the Western part of the port.
The new warehouses, currently being built in the port of Gdynia, represent modern port-centric class-A warehouses, which, according to Jones Lang LaSalle’s “Polish Container Ports: Adding Depth to the Logistics Market” report, correspond with the needs of the most demanding companies and are a relatively new trend in Poland.
According to JLL’s experts, the growth of container terminals, especially the deepwater ones, will have a positive influence on the Polish industrial warehousing market. “We expect that industrial market will continue to grow in the coming years,” said Jan Jakub Zombirt, senior research analyst at Jones Lang LaSalle. “We have been observing increased container traffic at the terminals in Gdańsk and Gdynia for the past several years. The inflow of products and the opening of new transportation opportunities will stimulate the logistics sector, including transshipment centers located in Poland,” Mr Zombirt added.
Mr Zombirt underlined that large container ships from, for example Asia Pacific, that previously were shipped directly into one of the major hubs of Northern Europe such as Rotterdam or Hamburg and then were forwarded to Poland on smaller feeder vessels, quite recently have set sail into the Baltic Sea.
Source: Cushman & Wakefield
Moreover, the only major port eastwards of the Danish Straits capable of servicing these vessels is Gdańsk’s Deepwater Container Terminal, which is now becoming a major transshipment hub for the Baltic region.
A budding business
“For now, the container ships traffic affects the warehouse market in Poland at a small but noticeable degree,” Mr Zombirt explained. “The first logistics investments located near the harbors are a green shoot of what may be observed in the near future. The pipeline in Gdańsk is impressive: as much as 500,000 sqm of warehouses could potentially be built within the Pomeranian Logistics Centre port-centric project, while today’s supply throughout the entire Tri-City region totals a modest 184,000 sqm,” Mr Zombirt added.
JLL expects the increasing container traffic in Poland’s seaports to soon reach critical mass, which will raise awareness of logistic operators, freight forwarders and corporates. “Subsequently, they might consider switching to one of the Poland’s ports in order to optimize supply chain costs. Currently the only large container shipping operator present in Gdańsk is Maersk Line, but certainly other companies are watching Polish and Baltic markets and considering entry,” Mr Zombirt added.
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