Warehouse demand peaks in H1 2014

Gross take-up reached 912,000 sqm in H1 2014, 17.2 percent more than in the same period of last year and 62 percent more than in H1 2012, according to a report by advisory JLL. Net demand (excluding renegotiations) amounted to 527,000 sqm in the first six months of 2014, which is 10 percent more than in H1 of the previous year. The spike in demand for warehouse space is largely due to the changes in public investment support announced in late 2013, lowering the amount of tax reliefs for investors starting July 1, 2014. “We’ve seen artificially pent-up demand for SEZ investments before July 1 of this year,” said Tomasz Olszewski, head of Industrial Department at JLL. Over the first six months of 2014 investors pledged to invest PLN 21 billion, 40 percent more in year-on-year terms. Poland’s 14 special economic zones granted 438 permits to investors who pledged to create 20,500 new jobs. The figures are expected to drop in the second half of the year. “Now there is little activity in SEZs, new investors are no longer lining up in front of SEZ offices,” Olszewski added. The areas where the highest net demand was recorded are Poznań (103,000 sqm), Warsaw suburbs (89,000 sqm) and Wrocław (88,500 sqm). “Poznań and Wrocław have been experiencing a real boom over the past year and a half. It started even before Amazon came in.” Olszewski said. The e-commerce giant has leased 300,000 sqm in built-to-suit centers near Poznań and Wrocław. Some of the deciding factors for the cities’ attractiveness are the proximity to the German border, as a lot of goods are being distributed to and from Germany and greatly improved transport infrastructure. “The maximum level of tax reliefs fell in the areas around Poznań and Wrocław from some 40 percent to about 25 percent, which has prompted investors to storm Special Economic Zones and apply for permits en masse before July 1,” Olszewski explained. Poland continues to have highly competitive rent levels compared to other CEE countries, ranging from a little over €2 per sqm per month for big box sheds in Warsaw suburbs and Central Poland up to €5 per sqm per month in small business units (SBU) located within Warsaw. Relatively low land prices, lower construction costs and competition between developers are some of the factors maintaining rent levels competitive. “Developers are increasingly eager to buy land. Only a year ago they would buy land only after they had secured a tenant,” JLL’s Olszewski added. There is 734,000 sqm of warehouse space under construction across Poland, including 77,500 sqm of speculative space. The majority is being build in Wrocław (295,000 sqm) and Poznań (278,000 sqm). By Agata Słowińska