According to data from JLL, more than a third of warehouse space is now leased by logistics tenants. And since all expert forecasts indicate that the industry is entering a golden age, logistics companies are undoubtedly going to need more and more warehouse space.
The Polish economy supports growth in the industry. Since Poland joined the European Union in 2004, its economic growth has remained at a high level – an average of 3.9 percent. “Logistics companies represent all industries. This means that whenever an industry grows, its growth is also reflected in the logistics industry,” says Tomasz Mika, Head of Industrial Department Poland at JLL. The country’s improving road infrastructure is another major strength. Many locations in Poland can be accessed quickly and conveniently. Moreover, companies can take advantage of the low costs of employment and skilled workforce. “Poland is home to professionals from every field, with various education and experience,” says Tomasz Olszewski, Head of Industrial CEE at JLL. Poland’s geographical location is also favourable for logistics providers. “The country is located in Central Europe, at the intersection of the North-South and East-West trade routes. Its location is a tremendous advantage, as it provides many opportunities. This is an extremely significant asset, especially since many companies choose to not only serve the Polish market, but also those of other countries in the region,” says Tomasz Mika, JLL.
According to estimates by Prologis and JLL, the value of the Polish e-commerce market will increase by 15 percent in 2016 compared to the previous year, reaching PLN 38 billion. This, however, is just the beginning. By 2020, the share of e-commerce in the total retail sales will reach as much as 10 percent. In the case of online purchases, intermediaries are removed from the supply chain, which presents logistics providers with new challenges.
Clients no longer want a regular transport service which they would have to control themselves. These days, logistics companies perform far more tasks than they used to – from receiving the goods from suppliers, through their storage and packaging to transportation. This means that their need for warehouse space increases. And there is plenty of top-quality warehouses in Poland.
“In terms of the amount of available space, Poland is the eighth market in Europe, and also the cheapest one. More and more space is being built on a speculative basis, so logistics providers have many options to choose from,” says Tomasz Olszewski, JLL. In the coming years, e-commerce has a chance to become the main force driving the demand for warehouse space. “Assuming that the e-commerce market grows at 15 percent a year, e-commerce companies could lease as much as 700,000 sqm by 2020,” adds Olszewski.
“Currently, the total supply of modern warehouse space in Poland amounts to more than 9.7 million sqm. It consists of projects which largely meet the expectations of logistics tenants. If they do not, the developers are very flexible when it comes to adopting suggested solutions. JLL experts have talked with logistics providers and developers and found that the way in which they work together has fundamentally changed throughout the years. “The developers listen to their clients’ needs and try to respond to the demand, often for very specific warehouses. Today, both sides increasingly see each other as partners who are working together to find the optimal solution,” says Kamil Szymański, Business Development Manager, JLL.
Although a few years ago many companies wanted to have their own logistics base, they are increasingly turning to outsourcing. “To manage its own fleet, a company must incur significant costs as well as hire additional staff. Delegating logistics services to an external company substantially reduces the costs,” says Kamil Szymański, JLL. Besides, as Szymański points out, logistics companies are highly experienced in the practice of efficient transport management. “For many, this knowledge is priceless, especially that a strong market position is built not just on the quality of products, but also on their speedy and timely delivery,” adds Szymański.
Prologis has published a report presenting these logistics locations in Central and Eastern Europe which are most popular among tenants. Central Poland, including Łódź, was named the most desirable region. The survey included 216 tenants from various industries, who rated 100 locations. The factors they considered to be the most important are: proximity to major economic centres, low costs and availability of skilled workforce.