Demand in Poland’s warehouse market will remain similar or slightly higher in 2024 than in the previous year, JLL estimate. Other trends expected this year include the gradual absorption of vacant space into the market and the stabilisation of rents.
“Provided that external conditions remain relatively stable, we expect demand in 2024 to remain at a similar or slightly higher level than the previous year. This is evidenced by, among other things, the continued growth of the largest players already present in Poland and brand new demand from companies entering the market and expanding their supply chains. Undoubtedly, foreign investments and their developing base are also a strong driver of growth, which generates demand for production and logistics space,” said Head of Industrial Agency Tomasz Mika said.
Economic forecasts also point to stabilisation. After the fluctuations and significant adjustments of previous years, the forecast of GDP growth in Poland is back to a relatively stable level of 2-3% per year (Oxford Economics).
“For many years, with the exception of the special year 2020, when the events related to the pandemic strongly boosted the e-commerce sector and the logistics market, we have been observing a strong correlation between GDP growth dynamics and the performance of the warehouse real estate market in Poland. The mild rebound of indicators in 2024 and 2025, after the near-recession year of 2023, allows for moderate optimism,” added Director, Research & Consultancy Maciej Kotowski.
As a result of the record development activity of 2021/2022, when space under construction was close to 5 million m2 (Q1 2023), 2023 was marked by rising vacancy rates. The average vacancy share of total existing space approached 8 per cent in Poland, increasing by almost 3 percentage points during the year, it stressed.
“Due to the increased availability of new warehouse space in Poland, we expect a mild slowdown in the construction market, especially for new speculative developments. The reaction of developers should avoid oversupply, and unleased space will gradually be absorbed by the market,” indicated Mika.
Symptoms of stabilisation are already visible in the warehouse real estate market in Poland and Europe. After 2022, which was responsible for around 20-30 per cent rent increases, the second half of 2023 will see a calming of the rate growth dynamics.
“The apparent stabilisation of construction and financing costs is the basis for a deceleration in the growth of warehouse rents. Any further increases will be effectively held back by the relatively high availability of space and competition between developers. On the other hand, given the dynamics of the market and the reaction of developers, we do not expect a correction and reductions, especially for new developments,” Mika said.
Improving economic indicators, increased predictability and verifiability of forecasts, elimination of some risks, and lower cost dynamics are just selected factors that influence the stability of the construction and logistics market, it was also stated.
“We expect market players to adjust their expectations of investment returns in line with the dynamics of changing rental levels, financing costs and property valuations. We believe that as prices have already reached a relative bottom, landlords will be more willing to put their assets up for sale. Further stabilisation of construction costs, together with positive signals from demand for warehouse space, may result in greater activity from capital willing to finance new projects on a forward funding basis,” Head of Industrial Investment CEE Sławomir Jędrzejewski concluded.
Source: JLL and ISBnews
