In Q1 2016, total demand, measured by gross take-up, reached 680,000 m², which was the best result for all of the first quarters for the last decade and an excellent sign for the remainder of the year. However, the share of net demand in total take-up (55%) remains in the lower level of the comparable quarters over the last two very busy years, when it typically ranged between 50% and 75%.
"We witnessed a particularly strong opening to the year on the Polish industrial market. In Q1 2016, total demand reached 680,000 sq m, which was the best first quarter result in the last ten years and augurs well for the remainder of the year. In addition, Poland’s industrial and warehouse stock crossed the 10 million sq m threshold in Q1. This makes Poland the ninth largest market in Europe”, says Tomasz Mika,Head of Industrial Poland, JLL. Advisory firm JLL summarizes the situation on the Polish industrial market at the end of Q1 2016.
In Q1 2016, the highest occupier activity was recorded in the Warsaw Suburbs, where tenants leased a total of 184,000 sq m, followed by Upper Silesia (142,000 sq m) and Poznań (123,500 sq m). The biggest lease agreement was signed by Kaufland (45,000 sq m) in Panattoni Park Bydgoszcz.
By the end of Q1 2016, Poland’s total industrial and warehouse stock was 10.37 million sq m. 418,000 sq m of new space was delivered to marketin the first three months of the year. The majority of new projects were completed in established locations such as Warsaw Suburbs (137,000 sq m), Upper Silesia (87,000 sq m) and Central Poland (85,000 sq m).
“Developer activity continues to be strong in the market. Currently, there is 640,000 sq m of space under construction, which places the industrial market behind the office segment but ahead of the shopping centre sector. The largest volume of warehouse space under development is in Poznań - 160,00 sq m, followed by Warsaw Suburbs - 108,000 sq m and Central Poland - 106,000 sq m”, comments Przemysław Ciupek, Senior Research Analyst at JLL. Speculative projects are on the rise.
“54% of industrial space currently being developed is on a speculative basis - without binding lease agreements. In comparison, by the end of Q1 2014 this total was a mere 5.5%. This clearly confirms investor trust and confidence in the growth potential of the Polish industrial market”, adds Tomasz Mika.
At the end of Q1 2016, the vacancy rate stood at 6.7%, which represented a small increase on Q4 2015's 6.2%. The highest vacancy rate is in the Warsaw Suburbs (11.8% of overall stock). Smaller markets, such as Szczecin and Opole have a 0% vacancy rate.
According to warehousefinder.pl,prime headline rents have remained stable throughout Q1 2016 with the most expensive industrial space still being recorded in Warsaw Inner City (€4.1 - €5.3 / sq m / month) and Kraków (€3.8 - €4.5 / sq m / month). The lowest rents for big box units are in Central Poland and range from €2.6 to €3.2 / sq m / month. Nevertheless, it is worth underlining that the above values do not include owners’ incentives and should be treated as a basis for further negotiations.