According to Axi Immo's publication "Report: Polish Warehouse Market in 2021", the total stock of modern warehouse space at the end of December 2021 amounted to over 25 million sq m, with the vacancy rate being only 3.72 percent nationwide.
In 2021, we recorded several spectacular lease transactions for over 100,000 sq m. sq m, where the e-commerce segment and logistics operators turned out to be the most active players. The good market conditions support the construction of new warehouse space, while the costs of materials and workmanship, which have been increasing since the second half of last year, indirectly contribute to the increase in initial rental rates. The Polish warehouse market has proven that every record can be set anew, and we wish this also in 2022 - comments Anna Głowacz, director of the Industrial and Logistics Department, Axi Immo.
Large portfolio transactions
The volume of investment transactions in the commercial real estate market in 2021 amounted to EUR 5.9 billion (+5% y / y). The warehouse sector was responsible for 53 percent. total demand, which translated into the amount of approximately EUR 3 billion (+ 15% y / y). The largest amounts of capital for Polish logistics and production properties were allocated by Asian funds (about 30 percent) and American funds. Portfolio transactions dominated the demand structure. The number of transactions concluded is noteworthy, as it increased by 40%. on a year-to-year basis. As in the previous year, investors were most interested in multi-format, fully leased warehouses located in the largest markets. Capitalization rates for such investments reached 5-5.5%. on regional markets and 4-4.3 percent. in the Warsaw area.
Projects in the city logistics and BTS / BTO real estate segments were also very popular. The three largest transactions included the sale of the EQT Exeter portfolio to the Singapore fund GIC (approximately 330,000 sq m, part of the portfolio, warehouse space located in Poland), and the purchase of Panattoni real estate as part of the Phoenix Project (285,000 sq m) by the American fund Ares Management and the sale by Elite Partners Capital's of rights to the property portfolio of Elite Logistics Fund I (250,000 sq m), owned by the Blackstone fund.
Demand again with a record
The total tenant activity at the end of 2021 under long-term lease contracts reached 6.8 million sq m. (+31% y / y). In the period from January to December last year, 446 thousand jobs were also signed. sq m (-25% y / y) under short-term contracts, which allowed for a record-breaking volume in the history of the entire market at the level of 7.25 million sq m. Over 70 percent Lease agreements were concluded in five main warehouse regions, with the highest activity recorded in Warsaw and its vicinity (1.2 million sq m), Poznań (1.12 million sq m) and Upper Silesia (1.1 million sq m).
Again, as last year, tenants from the e-commerce segment and logistics operators were responsible for over 50 percent. total demand. Among the largest transactions exceeding 100,000 sq m There were two contracts signed by Zalando (over 100,000 sq m in Bialy Błota in Hillwood Park and over 140,000 sq m in Bydgoszcz in Panattoni Park). In turn, a confidential tenant from the e-commerce segment decided to lease 130,000. sq m at Panattoni BTS Iłowa. In addition, DHL representing logistics operators will occupy about 105 thousand. sq m in the Panattoni BTS building in Poznań (Żerniki).
Appetite for more
The total stock of modern warehouse space in Poland at the end of 2021 amounted to over 25 million sq m. and it was an increase of 26 percent. Every year. From January to December last year, developers delivered 2.8 million sq m. (34% y / y), most of which was completed in the Upper Silesia (709,000 sq m), Warsaw (over 350,000 sq m) and Western Poland (336,000 sq m) markets. The largest completed investments include BTS Panattoni for Amazon (over 200,000 sq m), Hillwood Rokitno (112,000 sq m) and GLP Lędziny (111,500 sq m). In 2021, the percentage of speculative space under construction increased significantly (to around 50%), and large-scale warehouse projects began to appear more often outside the main regional markets.
According to developers' announcements, there is 4.8 million sq m of space under construction in the warehouse market. (+ 152% y / y), the vast majority of which will hit the market in 2022. Most new supply should be delivered in Lower Silesia (823,000 sq m), Upper Silesia (780,000 sq m), Central Poland (770,000 sq m), Warsaw and its vicinity (698,000 sq m) and in Poznań (558,000 sq m).
Least vacancy rate in history
The continuing demand for warehouse and logistics space lowered the vacancy rate to 3.72 percent. nationwide, with the lowest result in history since the third quarter of 2018, which then reached 4.3%. total resources. The regions of Upper Silesia are characterized by the greatest availability of space (7.8%, a decrease by 2.4 pp. Y / y), Kujawsko-Pomorskie (4.77%) and Warsaw and its surroundings (4.08% on average for zones I-III). At the end of 2021, in nominal terms, there were approximately 961,000 sq m free warehouse space. The largest amount for immediate lease is in Upper Silesia (345,000 sq m), Warsaw and the surrounding area (234,000 sq m) and Central Poland (127,000 sq m).
Since mid-2021, we have seen a slow increase in initial rental rates in the warehouse market. The reasons for this include high demand, limited availability of vacant space, and rising prices of materials and workmanship. Average rents in big box projects range between EUR 3.0 - 3.9 / sq m. in major markets, with Warsaw still remaining the most expensive location, with rents ranging from 4.9 to 5.3 EUR / sq m.
In 2022, the Polish warehouse market may turn out to be a time of challenges. The persistently high inflation is the main factor that will affect not only the sector, but also the entire economy.
The increase in the costs of materials and workmanship may contribute to the extension of the deadline for the new supply to be delivered, and we expect developers to find a solution to this situation quickly, commented Axi Immo experts.
The market will continue to be stimulated by the development of tenants from the e-commerce segments and logistics operators, which will optimize the time of delivery of goods to end users and the construction of regional distribution centers in former voivodeship cities. The continuation of ecotrends understood as meeting the assumptions and conditions of ESG and further green certification of warehouse buildings is also expected.