Although developers operating in Poland still focus on the most mature warehouse markets, they are also more active in the emerging local markets. Regions such as Rzeszów, Lublin, Bydgoszcz or Szczecin have become increasingly popular. What is the reason for this particular interest?
The Polish warehouse industry has never been in such a good shape as it is now. JLL’s data show that the total space leased in 2015 amounted to 2.2 million sqm, which is 160 thousand sqm more than in 2014. “The industrial property sector is largely dependent on the state of the Polish economy, which is currently very good. If its foundations and the international economic situation remain unchanged, we are expecting that in 2016 the supply of modern industrial space will exceed 10 million sqm,” says Tomasz Olszewski, Head of Industrial CEE at JLL. It is expected that most of the new investments will be made in the major markets, that is in Central Poland, the Warsaw Suburbs area and Poznań. However, experts believe that a large part of the new investment projects will be implemented in the emerging regions. “We will follow the developments in areas such as Lublin, Bydgoszcz, Rzeszów, Tricity and Szczecin. Their growth will surely be supported by the improvements in the road infrastructure. Potential new locations also include cities in Eastern Poland: Białystok and Kielce,” adds Tomasz Olszewski.
“The main factor attracting developers to emerging markets is the absence of competition. So far, there were no modern class A objects, which are now a standard that is expected by tenants. In each of these cities, there is a group of clients who are waiting for space that is secure and properly equipped, while facilitating both logistics and technological processes,” says Tomasz Olszewski, JLL. Another important factor considered by entrepreneurs is the availability of workforce. Regions with a high concentration of warehouse developments, such as the areas of Poznań, Wrocław and Stryków, saw a significant decrease in the unemployment rate. Consequently, offering a well-connected location that makes it easy to find adequate workforce poses a major challenge to the market. In this situation, the best choices seem to be Bydgoszcz, Lublin, Rzeszów and – in the long run – also Białystok and Kielce.
New investment projects
In 2015, the area around Bydgoszcz and Toruń was the only market where no new facilities were opened. One investment project is currently under construction there. The Panattoni Park Bydgoszcz logistics centre is a new development of Panattoni Europe in the area of the Bydgoszcz Industrial and Technological Park, 5 km from the city’s ring road. The logistics centre has access to a railway siding (Piła - Bydgoszcz - Kutno - Warsaw railroad). The class A warehouse space which is available for lease there can be used for storage and light manufacturing, as well as adapted to meet the needs of the tenant. Building a facility that would be suitable for a manufacturing company is also a potential option. A new warehouse and office facility is now under construction as part of the first phase of the centre. The warehouse will have an area of about 10,097 sqm. The scheduled completion date for all the works under the contract, including obtaining a use permit, is 25 June 2016. “Panattoni is currently the developer with the most investment projects in regional cities. It has even created a dedicated team of experts who are supposed to address this sector. The group’s task is to establish logistics parks in smaller cities,” says Tomasz Olszewski.
Growing demand for land
“After successfully implementing investment projects in smaller cities, developers are looking for attractive land on which to develop industrial space for these markets,” says Agata Zając, Associate Director of Industrial at JLL. It comes as no surprise that the most likely to be purchased are well-situated sites that can be conveniently accessed from major transport nodes. The Waimea company has already bought the plot where the first phase of the Logistic Park Bydgoszcz will be constructed. The investor has received a valid environmental approval. The logistics complex will be implemented in three stages, and its total area will amount to about 90 thousand sqm. It will include three buildings designed to meet the demands of the modern warehouse and logistics economy, as well as space adapted to the requirements of production processes. The construction of the first two warehouses on a 6-hectare plot is scheduled for the early second quarter of this year. Waimea Logistic Park Bydgoszcz will be developed on a 19-acre plot in the southeastern part of Bydgoszcz.
Effective measures implemented by local governments
Investors are also increasingly attracted by the actions of local governments. The authorities are very active in soliciting new businesses. This is perfectly exemplified by Lublin, which ranked among these European cities that performed best at attracting foreign investors. The city placed third in the prestigious ranking European Cities and Regions of the Future 2016/17, published annually by the fDi Magazine owned by the Financial Times Group. In addition, Lublin is an attractive region for warehouse investors. “A significant strength of this city is its strategic location. It is located in Eastern Poland, but at the same time it is still relatively close to Warsaw and transport links connecting it to Western Poland,” said Mariusz Sagan, Head of Strategy and Investor Relations Department responsible for the development of Lublin, in an interview with warehousefinder.pl. He added that what is particularly significant is the city’s location along the Via Carpathia route, which provides ample opportunities for logistics parks operators and their tenants. Other important considerations include relatively low costs of labour, conducting and maintaining business, and the availability of skilled workforce. “Lublin can also boast the highest level of state aid in Poland, which ranges from 50 up to 70 percent. Moreover, each project is assigned with a Project Manager, who helps in the process of implementing the investment project at all its stages. No investor is left to their own devices,” emphasises Mariusz Sagan. “Lublin has its Special Economic Zone, offering nearly 120 hectares of investment land”, says Mateusz Iłowiecki, Senior Consultant at JLL, responsible for the Eastern region of Poland.
In the coming years, the development of new warehouses will be stimulated by the extremely dynamic growth of the e-commerce industry. A report prepared by Prologis and JLL states that by 2020, new lease agreements concluded by e-commerce companies could total up to 700 thousand sqm. This will result in a significant increase in the impact of e-commerce on supply chains and the logistics property market, as well as greater demand for modern warehouse facilities. “What counts the most in e-commerce is the speed of delivery, and that is what makes the development of new warehouse locations in Poland inevitable,” concludes Tomasz Olszewski, JLL.
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