Big Box's smart money on the regions
CB Richard Ellis (CBRE) Polska has released its latest M2 - Big Box Poland industrial market report, and logistical space seems to be flying off the shelves. Take-up over the first six months of the year came to 170,000 sqm, up 32 percent compared to the previous six months, and 137 percent more than the same period in 2004. It hit a record level of 230,000 sqm, with a large number of foreign companies moving into Poland.
However, this has lead to an increase in vacancy rates, which comes to 8.5 percent overall, up by a considerable three percent, which CBRE attributes to a large supply on the market of some 106,000 sqm. Total warehousing stock amounted to 1.5 million sqm at the end of Q2 2005, with more than 106,000 sqm delivered to the market and 154,000 sqm getting under construction. At the moment, there is 375,000 sqm being built. Despite the rise in vacancy rates, CBRE is confident that take-up will continue to be strong outside of Warsaw.
CBRE splits the logistics and warehousing market into three sectors. Sector one is warehouse and warehouse-type business parks (class A and B only) within 20km of central Warsaw. Total stock stood at 598,000 sqm and the vacancy rate jumped from 6.04 percent in Q1 2005 to 8.98 percent in Q2. In the second quarter some 16,500 sqm was leased with take-up reaching 36,500 sqm, and rents increasing slightly from E2.70-5 (zł.11-20) per sqm per month to E2.70-5.50 (zł.11-22.40).
Sector two is made up of logistics parks beyond the 20km radius and within 100km of central Warsaw. Total stock was 571,000 sqm with 71,000 sqm developed and 20,000 sqm breaking ground. A further 90,000 sqm is scheduled for completion this year. Supply was heavy in this sector and vacancy rates increased from 8.69 percent in Q1 to 9.28 percent in Q2. Take-up also increased and came to 66,000 sqm, with 86,500 sqm leased in the first six months, which is three times as much as the first six months in 2004. Rents remained within E2.90-3.40 (zł.11.80-13.90) per sqm per month.
Sector three is attracting a lot of interest, as companies look to locate outside of the Warsaw area. Total stock came to 320,000 sqm, with a further 260,000 sqm under construction. Some 135,000 sqm broke ground in Q2 and 86,000 sqm was leased, bringing take-up in the first six months of the year to 107,500 sqm. This figure is 30 percent higher than in the second half of 2004 and three times as much as H1 2004,with pre-lets dominating the market. A number of new projects will enter the market in the next quarter, but rents remained at between E3.20-3.75 (zł.13-15.30) per sqm per month, with the vacancy rate the only fly in the ointment - it shot up to 6.26 percent from just 1.94 percent in the previous quarter.
"Sector three appeared to be the most dynamic sector in Q2 2005," said John Palmer, managing director at CBRE Polska. "We assume that this trend will be maintained, due to considerable demand for logistics space outside Warsaw."
"The most attractive regions for tenants are Łódź, Poznań, Wrocław, Silesia Conurbation and Tri-City," said Marek Wachowski, head of the industrial department at CBRE Polska. "Poznań is of great interest to German companies, which decide to move their warehouse here due to a very convenient location, the lower cost of leasing space and the possibility to employ well-qualified, cheap labor force."
However, this has lead to an increase in vacancy rates, which comes to 8.5 percent overall, up by a considerable three percent, which CBRE attributes to a large supply on the market of some 106,000 sqm. Total warehousing stock amounted to 1.5 million sqm at the end of Q2 2005, with more than 106,000 sqm delivered to the market and 154,000 sqm getting under construction. At the moment, there is 375,000 sqm being built. Despite the rise in vacancy rates, CBRE is confident that take-up will continue to be strong outside of Warsaw.
CBRE splits the logistics and warehousing market into three sectors. Sector one is warehouse and warehouse-type business parks (class A and B only) within 20km of central Warsaw. Total stock stood at 598,000 sqm and the vacancy rate jumped from 6.04 percent in Q1 2005 to 8.98 percent in Q2. In the second quarter some 16,500 sqm was leased with take-up reaching 36,500 sqm, and rents increasing slightly from E2.70-5 (zł.11-20) per sqm per month to E2.70-5.50 (zł.11-22.40).
Sector two is made up of logistics parks beyond the 20km radius and within 100km of central Warsaw. Total stock was 571,000 sqm with 71,000 sqm developed and 20,000 sqm breaking ground. A further 90,000 sqm is scheduled for completion this year. Supply was heavy in this sector and vacancy rates increased from 8.69 percent in Q1 to 9.28 percent in Q2. Take-up also increased and came to 66,000 sqm, with 86,500 sqm leased in the first six months, which is three times as much as the first six months in 2004. Rents remained within E2.90-3.40 (zł.11.80-13.90) per sqm per month.
Sector three is attracting a lot of interest, as companies look to locate outside of the Warsaw area. Total stock came to 320,000 sqm, with a further 260,000 sqm under construction. Some 135,000 sqm broke ground in Q2 and 86,000 sqm was leased, bringing take-up in the first six months of the year to 107,500 sqm. This figure is 30 percent higher than in the second half of 2004 and three times as much as H1 2004,with pre-lets dominating the market. A number of new projects will enter the market in the next quarter, but rents remained at between E3.20-3.75 (zł.13-15.30) per sqm per month, with the vacancy rate the only fly in the ointment - it shot up to 6.26 percent from just 1.94 percent in the previous quarter.
"Sector three appeared to be the most dynamic sector in Q2 2005," said John Palmer, managing director at CBRE Polska. "We assume that this trend will be maintained, due to considerable demand for logistics space outside Warsaw."
"The most attractive regions for tenants are Łódź, Poznań, Wrocław, Silesia Conurbation and Tri-City," said Marek Wachowski, head of the industrial department at CBRE Polska. "Poznań is of great interest to German companies, which decide to move their warehouse here due to a very convenient location, the lower cost of leasing space and the possibility to employ well-qualified, cheap labor force."
