Warehouse market continues to boom

King Sturge's Poland Commercial Property Market 2007 report details the dynamic growth of Poland's logistics sector. This growth is concentrated in a few regions, namely Central Poland, Upper Silesia and Lower Silesia.

Dominik Witkiewicz, a market analyst at King Sturge, noted that, "In 2006, supply of modern logistics space increased by 600,000 sqm and leasing contracts for over 900,000 sqm were finalized."

The 2007 report focuses on the capital, where there is a tendency to move away from Warsaw's immediate center (zone 1) into properties located in zones 2 and 3, which constitute a radius of 10-30 km and 30-50 km from the city center, respectively. Companies settling in zone 1 tend to be smaller businesses with distribution activity focused in that area. These firms typically look for space between 1,000-2,000 sqm.

In Warsaw's zone 2, the demand for logistics space increases to the 3,000-5,000 sqm range, occupied mostly by manufacturing companies. Zone 3 sees  many third-party logistics (3PL) firms seeking 5,000-10,000 sqm. Due to a surge in the supply of developed properties, there is currently a higher level of  vacancy in zone 3, which is expected even out as the year progresses.

The ŁódŸ voivodship, located within the Central Poland region, is seeing high demand from retail operators, 3PLs and large global companies such as Dell, for facilities between 10,000-20,000 sqm.

After Central Poland, Upper Silesia has grown to become the second-most important market, seeing strong demand for spaces typically between 3,000-15,000 sqm. Lower Silesia has seen investment from major LCD firms like LG and Phillips in manufacturing plants close to the city of Wrocław. Demand here usually requires areas between 3,000-20,000 sqm.

Witkiewicz believes the Warsaw area will maintain its prime position on the market, holding the largest stock of warehouses in the country. "However, we are seeing a distinct rise in both supply and demand with regard to the other regional markets. In 2007, we expect to see a continued rise in all existing markets and the establishment of new markets, like the Tri-city Pomerania region," he adds.

The large number of  site acquisitions across all the regions last year suggests an increase in offers of developed properties in 2007.