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The past year has heated up the warehouse market. Demand for such space reached a record 5.2 million sqm and was a fifth higher than in 2019, according to CBRE’s latest report. Vacancy levels have also fallen. In total, warehouse space in Poland currently occupies more than 20.5 million sqm. CBRE experts point out that the development of e-commerce and the growing needs of the logistics sector will foster a warehouse boom. Poland may be the main beneficiary of this in Central and Eastern Europe due to its low operating costs.
– The year 2020 has shown how important efficient logistics is for meeting basic social needs in a pandemic, it has also realised the great resilience of this sector to the economic downturn. Despite the turmoil and restrictions, the warehousing sector in Poland broke records throughout the year. The development of Internet sales and the need to modify supply chains drove demand for warehouse space. It is true that in the second quarter, a slight slowdown was felt, caused by the uncertainty of tenants and investors, and we also noticed a greater interest in short-term contracts, but the situation quickly returned to the path of intensive development, says Beata Hryniewska, head of the Warehouse Space and Logistics Department at CBRE.
Historic year for warehouses
The Covid-19 pandemic contributed to record interest in warehouse leasing in 2020. Demand reached an unprecedented 5.2 million sqm, 21% higher than a year earlier. The largest transaction in the history of the Polish logistics market also took place – the lease of 200,000 sqm at Panattoni BTS Świebodzin. The vacancy rate has also fallen, which now stands at 6.6% and is 0.6% lower than in 2019.
In 2020, 2 million sqm of new space was delivered, 26% less than a year earlier. This was due to fewer developments and slight delays in completion. More than 2 million sqm currently remains under construction.
– It can be forecast that in 2021 the amount of new warehouse space delivered to the market will be similar to last year, and demand will continue. Companies looking to expand online sales will need to secure more logistics space. There will be an increased focus on building supply chains that are resilient to economic disruption, increasing inventory and diversifying suppliers. As a result, we will see a further decline in vacancy rates. The sector will continue to develop intensively, and Poland may be one of the main beneficiaries in Central and Eastern Europe due to its low operating costs and high returns on investment – says Beata Hryniewska.
Rents at a stable level
Rents for warehouse space are currently around 4-5.2 EUR/sqm/month in Warsaw and 2.7-3.9 EUR/sqm/month in other regions of Poland. CBRE experts forecast that they will not change in the nearest future, similarly to packages of additional financial contributions and rent exemptions.