18:25 Poland's industrial market is back on track | |
| Tenants are again actively looking for warehouse space. A recent report
published by Jones Lang LaSalle showed that 1.69 million sqm of
distribution space was leased in 2011. Such a positive result has not
been recorded since 2008. With regards to 2011, it was undoubtedly a good year for both developers and tenants. Increasing demand and the return of new warehouse projects, which were on hold during 2009-2010, are the best signs of the current upswing. These are the main conclusions of the report ‘2011: Industrial Market in Poland’. The market is driven both by record-breaking demand volumes and growing developers activity. Lease contracts signed in 2011-covered 1.69 million sqm of warehouse space. This result is better than 2010 by over 400 000 sqm. Numerous contracts that were signed in previous years were coming to their break in 2011 and there was a need for extension or renegotiation. As a result, 40 percent of demand was lease renewals. The most important tenant sectors were logistic operators. In 2011 they leased 468,000 sqm what represented 28 percent of the market. Electronics companies were also a key player. They leased space of 271,000 sq m in 2011. High demand was also generated by the food industry (176,000 sqm) and retail chains (169,000 sqm). The upturn in the industrial markets is also seen in the construction activity. Some 371,000 sqm of new warehouse space was completed in 2011. Developers built again speculatively, which practically disappeared after crisis in 2009. Although the speculative projects were realized on a small scale, their return is a proof that developers are confident about the future. At the end of 2011, 354,000 sqm of warehouse space was under construction, almost as much as in the total completion figure for the whole 2011. This shows that the warehouse market in 2012 will also intensively develop further. Although the number of new completions increased in 2011, vacancy rate was falling. At the end of 2011 potential occupiers could choose among 754,000 sqm of available warehouse space. Vacancy rate stood at 11.5 percent. To compare, at the end of 2010 there was almost 1 million sqm of existing warehouse space vacant, which represents a vacancy rate of 15 percent. As regards to rents, after a series of fluctuations rents stabilized at the end of 2011. The most attractive prices were offered in locations with high vacancy rates. Range of effective rents in Poland remained wide – from €2.10 per sqm per month in Piotrkow area to €5.30 per sqm per month within the Warsaw region. If the current high demand activity continues and availability of warehouse space decreases, rents will witness under upward pressure in 2012. It will be especially visible in locations with low vacant space (Krakow, Poznan and Upper Silesia). It is worth looking at development of regional markets. Although Warsaw (including suburbs) and Upper Silesia are the most important warehouse regions, their dominance should be less pronounced during the next few years. Development of the highway network will strengthen the Central Poland region. Other markets will also develop further including Krakow, Poznan and Upper Silesia. Tomasz Mika, Head of Industrial Department Poland at Jones Lang LaSalle, commented: "Both tenants and developers will assess the previous year positively. Record-breaking demand size and significant quantity of completions and planned constructions are the best signs of the upturn in the warehousing market. The outlook for 2012 looks also promising. The only serious threat is the uncertain situation in the EU. If Poland goes through the European crisis, warehouse market will have a good year ahead.” Source: europaproperty.com | |
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