The year of the regions
CEE President of the largest warehouse developer in Poland, ProLogis, Dr Michael de Jong-Douglas is keen to ram home the message that 'Poland is where it's at'.
"The market is more promising than ever," said Dr de Jong-Douglas said. His optimism is confirmed by the report on the warehouse market published by the independent property consultants King Sturge.
According to the report, modern warehouse stock in Poland increased to 1.36 million square meters, over one million square meters of which is located in the Warsaw region (made up of three zones).
Watch this space
ProLogis owns more than 30 percent of the total warehouse space in the country with over 481,000 square meters of warehouse and office space in nine parks in Warsaw, Błonie, Teresin, Poznań, Poznań II, Piotrków, Będzin, Sosnowiec and Wrocław. The largest investments include Prologis Park Teresin, which totals over 160,000 square meters and is made of up from six buildings, and ProLogis Park Błonie of 100,000 sq. m.
The figures reveal a significant jump from the early 1990s when Poland was a desert as far as the warehouse space was concerned. Then the usual practice was to simply adapt redundant factory buildings as warehouses. But as the outsourcing of logistics services grew popular with many companies, so did the demand for modern warehouse space, especially from logistic companies.
Outside town
Although the bulk of Poland's modern warehouse space is located in Warsaw and its vicinities, developers have begun to look at other regions of Poland.
"We believe that in 2005 demand will remain strong and more focused on regional markets, especially Poznań, Silesia and central Poland," says the King Sturge report.
Each of the three regions highlighted by analysts possessed less than 100,000 squre meters of warehouse space at the end of 2004, but according to King Sturge's report they have great development potential.
Central Poland's warehouse development potential is estimated at over 1.4 million square meters, Poznań's potential is predicted to be over one million square meters, while Silesia could provide just under one million square meters of warehouse space. ProLogis' activities are mirroring current trends with several of its planned investments located outside of Warsaw region. "Following the customer's demand we plan additional parks in southern Poland, the Warsaw region and northern Poland," de Jong-Douglas revealed.
Hub time
With the prospects for the warehouse development looking good, a question arises could Poland become a distribution center for western companies for the whole CEE region? "From an economic point of view it is cheaper to have one center for the whole region, or for a couple of countries, than to have a distribution center in each of the countries," said the director of sales, warehousing and distribution at Maersk Logistics, Konrad Rosiński.
"Elements such as the central geographical situation of Poland, market size, and removal of customs barriers allows efficient distribution from one warehouse to receivers located either in Poland or in neighboring countries. Since Poland is a much larger market than in the neighboring countries, most likely the central magazine would be located in Poland," Rosiński added.
ProLogis' de Jong-Douglas confirms this: "Poland with its strategic location with a large population. In terms of growing logistics hubs it is already the distribution center for CE for our European customers (...) This trend concerns logistics, retail and light manufacturing."
Rotten roads
The lack of transport infrastructure is definitely a hindrance when it comes to distribution and transport, especially in comparison with Western Europe and a factor that many logistics experts feel urgently needs addressing.
"The calculation of time is a lot different there [in Western Europe] than in Poland. But if you compare us to the surrounding countries [such as our southern neighbors], the difference is not that big, although their transport system is definitely better," Rosiński said.
