Regional bias
Poland's warehouse market saw another dynamic year in 2007, according to annual reports by Knight Frank and Cushman & Wakefield (C&W). Nationwide, stock grew by some 40 percent and total regional stock amounted to over 1.8 million sqm, exceeding the amount of stock in the capital area for the first time ever.
"Just a few years ago modern warehouses were concentrated around Warsaw. In 2005, new regions appeared on the warehouse investment map, namely: Upper Silesia, Poznań, Wrocław and Łód. Currently those markets are enjoying a substantial period of prosperity," said Tomasz Olszewski, partner and head of the industrial department at C&W.
He added, "In 2006 new warehouse developments appeared on the Tri-city and Kraków markets. Nowadays modern warehouses are also being developed in Szczecin."
The total warehouse stock in Poland in 2007 amounted to over 3.8 million sqm and around 1.4 million sqm of modern warehouse space was leased. The level of rents remained stable in most regional cities and varied between E3-4 per sqm per month. Warsaw, meanwhile, saw a slight growth in leasing costs, with rents ranging from E3.15-7.75 per sqm.
Due to high demand and relatively low supply, many developers were willing to undertake warehouse projects on a speculative basis and lease them before completion.
Analysts anticipate further growth in the sector in 2008, especially in smaller regional cities. Along with an improvement in road infrastructure, this year will see more warehouse development in eastern Poland, in cities such as Lublin, Rzeszów and Przemyl, which offer good access to Ukraine.
"The growth forecast for modern space for 2008 is still optimistic, both for developers and clients searching for warehouses. Competition among developers will be tougher in the regions where investment lands are still available, whereas in places with a low supply of land for investments - Wrocław, Upper Silesia - developers will dictate the terms," said Olszewski.
