The industrial and logistics market is seeing an increasing balance between demand for space and new developments. There is currently 2.8 million sqm of new space under construction (down 18% from 2022), half of which is being built speculatively, according to a CBRE report. In 2023, 5.7 million sqm will be leased, with vacancy rates normalising at 6-8% and rents stabilising as a result.
According to the Market Outlook 2024 report, the total stock of industrial and logistics space at the end of 2023 was 11% higher year-on-year at 31 million sqm. During this period, 3.7 million sqm were completed, the second highest figure on record. Most such space was added in the Warsaw Region (618,000 m2) and Katowice (599,000 m2). In turn, the largest investment turned out to be the Panattoni BTS Zalando Bydgoszcz facility of 146,000 m2. Demand for warehouses in 2023 amounted to 5.7 million sqm of space, the third highest on record, despite a decrease of 15%. compared to 2022.
“Regardless of the economic turmoil, the warehouse market in Poland remained stable. Nevertheless, between 2017 and 2022, we saw an excess of demand over supply, which changed in 2023 and the first signs of oversupply appeared. We are now seeing that the market is beginning to strike a better balance between the availability of space and the demand for it, as indicated by, among other things, vacancy rates normalising at a healthy 6-8%. Investment and construction financing costs are also stabilising. Therefore, in the near future we should not expect jumps in rents, which currently amount to EUR 7.25 per sq m per month in the city of Warsaw and between EUR 3.9 and EUR 5.4 in the rest of the country. However, it is important to remember that despite the current stabilisation, there are still very large transactions on the horizon that will drive demand,” said the director of the warehouse and industrial space department at CBRE Michał Śniadała, quoted in the release.
There is currently 2.8 million sqm of industrial and logistics space under construction, half of which is speculative development – 40% higher than at the end of 2020 and 18% lower compared to the end of 2022. The leader in terms of space under construction is Wrocław, where 775,300 sqm of it is being built, or 28% of all developments in Poland, it was stated.
“Poland remains one of the most attractive locations for industrial and logistics activities in Europe. We are constantly observing the development of companies present on the market, the expansion of their supply chains, as well as the emergence of new players. Demand for industrial and logistics space will be generated by both manufacturing and e-commerce companies. Unlike other markets in the region, e-commerce transactions are taking place in Poland all the time,” said Sniadała.
Source: CBRE and ISBnews
