Record-breaking demand for warehouse space in CEE – C&W

The amount of industrial space leased in Central and Eastern Europe (Poland, Czech Republic, Hungary, Slovakia and Romania) in 2016 was the largest ever recorded, totalling 5.7 million sqm. This represents a 25 percent increase over the preceding two years when about 4.5 million sqm was leased, according to findings of research conducted by advisory firm Cushman & Wakefield.

Out of the 5.7 million sqm, Poland and the Czech Republic account for more than 75 percent of take-up overall; 1.4 million sq m was leased in the Czech Republic, same as in the previous year. Poland, Romania and Hungary broke records. The biggest historical take-up was reported in Poland with a total of 3.1 million sqm, which is 25 percent more than in 2015.

“It is worth highlighting that net demand, including new transactions and expansions, equated to approximately 70 percent of the total take-up in Poland. In the same time we also witnessed the deal sizes increasing with 75 transactions being recorded for units in excess of 10,000 sqm, a trend we expect to continue seeing in the coming years,” said Tom Listowski, partner, head of Industrial and Logistics Agency Poland and CEE Corporate Relations, Cushman & Wakefield.

The strong take-up among tenants was linked with an extensive new development at 2.2 million sqm in the CEE region. The volume of new development for 2016 reached a similar figure as in the record-breaking pre-crisis years of 2007 and 2008 when 2.5 million sqm was built annually. This makes it the third best year in terms of modern storage space built in the last 19 years.

New industrial development traditionally focused on Poland with an increment of almost 1.2 million sq m recorded as the second best year in the last 19 years. A total of 500 000 sq m was built in the Czech Republic, a figure comparable with 2015. Romania made the biggest leap with almost 400 000 sq m of new development. That is more than the sum of all industrial space developed in Romania since 1998. Hungary experienced rapid growth too, with development multiplying more than 15 times over 2015.

“For 2017 we expect the amount of development to be similar as in the previous year. Vacancy rate will remain around 6 percent due to the strong demand. The investment in the industrial sector is estimated at around €1.4 billion,” concluded Ferdinand Hlobil, partner and the head of the CEE Industrial Team at Cushman & Wakefield.

A total of 22 million sqm of prime industrial space is currently available for lease in Central and Eastern Europe.


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