In the first quarter of 2022, the activity of both developers and tenants on the warehouse and industrial market remained at a relatively high level. At the same time, the amount of available space decreased significantly for another quarter in a row, and rising labor and construction costs as well as disruptions in supply chains resulted in an increase in rents. We anticipate that in the near future developers will be more cautious about starting new investments - says Jakub Kurek, director of the Industrial and Warehouse Department at Newmark Polska.
In the first quarter of 2022, developers delivered almost 1.3 million sq m to the market. modern warehouse and industrial space. The markets with the greatest development activity in this period were the voivodeship Wielkopolskie and Dolnośląskie, where 281.4 thous. sq m and 216,950 sq m new space.
At the end of March 2022, over 4.82 million sq m was under construction. of modern space, i.e. by almost 4 percent more than in the fourth quarter of 2021 and over 105 percent. more than at the end of the first quarter of 2021. Most new facilities were built in Central Poland (778.2 thousand sq m), Upper Silesia (751.7 thousand sq m) and in the voivodeship. Mazowieckie (645.2 thousand sq m). However, due to global disruptions in supply chains and difficulties related to access to building materials, as well as their rising prices, we can expect a gradual reduction in new supply and an extension of the construction time of warehouse facilities.
The total volume leased in the analyzed period amounted to almost 1.6 million sq m, which means a decrease by 2%. year on year and 36 percent. quarter to quarter. Net demand for warehouse and industrial space increased to 1.17 million sq m. and accounted for almost 74 percent. gross demand. The highest tenant activity was recorded in the voivodeship Śląskie, Mazowieckie and Łódzkie voivodeships, whose share in the total transaction volume was 24.2, 18.6 and 14.8 percent, respectively. In the first quarter of 2022, new lease agreements (67%) had the highest percentage share in the transaction volume, followed by renegotiations (26%) and expansions (7%). It is also worth emphasizing that at that time tenants leased a total of 91.8 thousand. sq m on the basis of contracts concluded for a shorter period (up to one year).
The largest transactions concluded in the first quarter of 2022 included, among others: the construction of a BTS facility with an area of 100,000 sq m by Exeter. sq m for a confidential tenant from the retail sector in Świebodzin, renegotiation combined with the expansion of a confidential tenant from the retail sector in Segro Logistics Park Gliwice (66.3 thousand sq m) and the lease of 47.7 thousand sq m. sq m in Hillwood Łowicz Południe by Dealz.
The share of vacant space in the total stock decreased to 3% at the end of March this year, which means a decline by 0.7 pp quarter on quarter and by 3.3 pp year on year. There were 762.2 thousand sq m of rentable space in the existing buildings. sq m, compared with 2,278,500 sq m. in facilities under construction.
The highest levels of vacancies were observed in the voivodeship Lubelskie and Opolskie (6.1% each) and Upper Silesia (5.6%), while the lack of available space was recorded in Lubuskie, Podkarpackie, Podlasie and Warmińsko-Mazurskie - says Agnieszka Giermakowska, director of the Market Research Department and Advice in Newmark Polska.
Due to the growing costs related to the construction and operation of warehouse and industrial facilities, we are seeing a gradual increase in rents in most warehouse locations. At the end of the first quarter of 2022, warehouse space in Warsaw (zone I) was the most expensive.
The volume of investment transactions on the Polish commercial real estate market in the analyzed period amounted to EUR 1.66 billion and was higher than that recorded in the corresponding period of last year by approximately 18%. (EUR 191 million was allocated to the warehouse sector). Such a good result proves the resilience of the domestic real estate market to the recent turmoil in our region, such as the war in Ukraine, rising construction costs, further interest rate increases and high inflation. Safe and low-risk real estate remains the most popular among investors, incl. logistics and warehouse parks. On the other hand, capitalization rates range from 4.75% to 5.25%. for multi-year warehouse parks with long lease agreements.