According to the National Bank of Poland, GDP in Poland in the period January-March 2022 increased by over 8%. compared to the same period last year. Both the pandemic and the war in Ukraine are factors causing market imbalances and destabilizing global supply chains. The economies of many countries are currently faced with an insufficient supply of raw materials and inputs, as well as high inflation. All of this can contribute to a downturn.
The inflation rate in Poland continues to increase and in April 2022 it reached 12.4%. Throughout 2022, the annual average price index is also expected to remain in double-digit (10.9% according to preliminary forecasts). The data from the Central Statistical Office indicate a high dynamics of industrial production, which increased by 16.7 percent. compared to the first quarter of 2021, when an increase was recorded by 7.8% In all major industrial groupings in March this year. There was an increase in production on an annual basis, with the production of energy-related goods increasing the most - by 57.3%.
In the period January-March 2022, the total demand for warehouse space in Poland reached 1.56 million sq m. This is a result of 5 percent. lower than in the corresponding period of the previous year, but at the same time it is more than a half higher than the average for the same period in 2018-2020. In terms of demand, there have been no significant changes - the share of new contracts and expansions still prevails at the level of 74%. lease transaction volume, and the remaining 26 percent. constitute contract renegotiations.
In the first quarter of 2022, a record 1.27 million sq m was completed as part of 45 projects. of warehouse space, and in the last 12 months it was 3.6 million sq m, which is an increase by 57%. Every year. However, the growing supply was not able to keep up with the demand, which is well illustrated by the further compression of the vacancy rate by 0.5 pp. on a quarterly basis and by 3.3 pp. on an annual basis. At the end of the first quarter of 2022, the vacancy rate reached 3.3%. - the lowest result since the beginning of the measurements. Net absorption, i.e. the level of warehouse space absorbed by the market in the analyzed period, amounted to a record 1.41 million sq m, recording an increase by 85%. on an annual basis. Compared to the previous year, the greatest changes in the vacancy rate were recorded in the following voivodeships: Pomorskie (1.6%; -5.0 pp.), Wielkopolskie (0.5%; -4.5 pp.), Łódzkie (2, 5 percent; -3.8 pp.), Lower Silesia (3.2%; -3.5 pp.), Silesia (5.7%; -3.6 pp.). Małopolska (0.5%, -3.1 pp.) and Mazowieckie (4.8%; -2.7 pp.).
In Q1 2022, developers started the construction of almost 1.5 million sq m, and the total volume of warehouse space under construction amounted to 4.8 million sq m. About 50 percent. the investment has been secured with lease agreements. Forecasts say that assuming there are no significant delays in the implementation of development investments, the resources of modern warehouse space, already exceeding 25 million sq m, will increase by over 20 percent. during the next 12 months.
Both the growing construction costs and the decreasing availability of warehouse space contributed to the increase in rents observed in most regional markets in Poland. Base rates for the best warehouse properties increased the most in Kraków and the Tri-City, by 16%. compared to last year. In the current market conditions, the range of financial incentives offered to tenants is narrowing, leading to an increase in effective rental rates. Given the still high inflationary pressure, rents may be further adjusted in the coming months of this year.