While e-commerce companies and logistics operators often need the ability to scale operations quickly, manufacturers tend to focus on long-term operational stability and security. As the market matures, leases are becoming longer, with 10-year contracts now standard market practice across Western Europe, says Jakub Kurek, Head of Industrial and Warehouse, Newmark Polska.
Poland’s industrial market has clearly stabilised over the past two years. Data shows that total modern stock is approaching 37 million square metres, while new supply growth has slowed markedly since the peak year of 2022. What’s your view on this from an advisory perspective? What has changed the most since the period of intense growth?
Jakub Kurek, Head of Industrial and Warehouse at Newmark Polska: The market has naturally moved from a phase of fast-paced expansion into a period of stabilising and maturing. Development activity remains solid but has become more closely aligned with actual demand – this year’s new supply is expected to reach around 2 million square metres. The market environment is gradually becoming more orderly and structured, with availability improving and some facilities being put up for sale.
From an advisory perspective, this shift brings a different set of challenges. During the rapid growth phase, speed and securing space were the key priorities. Today, qualitative analysis plays a much bigger role – including adjusting location, technical specifications and lease conditions to a client’s long-term business strategy. The market has become more selective and decisions are now made with greater caution and a stronger awareness of consequences.
Key aspects of this shift include the changing roles of property owners. More and more investment funds are choosing to manage portfolios and handle leasing in-house. How does this process impact your work as advisers and the situation of tenants?
Indeed, we are observing a segmentation of ownership models. Companies that developed industrial parks with the support of specialised developers are increasingly moving towards managing and enhancing their assets independently. Investment funds are taking a similar approach, opting to operate properties using their own resources.
A few years ago, leasing new developments was largely the domain of developers; today, there are significantly more partners involved. For advisers, this means operating in a more complex environment. For tenants, it translates into negotiations with multiple owners, each with different decision-making processes and leasing policies. At the same time, intensifying competition among landlords is working in tenants’ favour, strengthening their bargaining power.
Another challenge is the growing sophistication and expectations of clients. A simple comparison of rental rates is no longer enough. Today, tenants expect in-depth scenario analysis, cost simulations and a long-term assessment of how a property will impact their operations. As a result, the advisory process increasingly requires additional layers of analysis – for example, evaluating local labour markets and workforce availability. Our role has evolved from simply identifying vacant space to delivering solutions tailored to a client’s actual operational processes.
Lease renegotiations account for an increasing share of the leasing market. Is this a sign of caution among companies, or also evidence of stability in Poland’s industrial market?
Renegotiations have always been an integral part of the industrial market, but today they play a much more prominent role. On the one hand, they reflect caution among companies, which – in an uncertain macroeconomic and geopolitical environment – prefer to optimise existing locations rather than take on the risk of relocation. On the other hand, they are a clear indicator of market maturity, with both landlords and tenants flexibly adjusting terms of cooperation in response to evolving conditions.
Lease renewals now account for more than 50 per cent of all deals. At the same time, development activity continues unabated, demonstrating that the market is in a healthy balance between stability and growth.
What do tenants negotiating extensions most often want to change in their leases?
Renegotiations today go far beyond simply discussing rent. Tenants – together with their advisers – increasingly negotiate a range of alterations to ensure their facilities continue to meet current operational needs. These may include additional parking spaces, office upgrades, technical repairs, infrastructure improvements and landscaping works. Having in-depth knowledge of the building is a major advantage – after several years of occupancy, tenants know exactly what hasn’t worked and what changes could improve operational efficiency. For landlords, this creates an opportunity to secure a lease for another five or more years. Extensions also help foster stronger, long-term partnerships, built on real dialogue rather than a one-off transaction.
At the same time, flexibility is a central theme in the industrial market. How is its role changing from the perspective of tenants?
Today, flexibility is about much more than shorter lease terms. It refers to a package of solutions that allow companies to better manage risks without limiting growth opportunities. Tenants increasingly expect options to expand within the same park, sublease part of their space or adapt facilities to evolving logistics or production processes.
The approach to flexibility also varies by sector. While e-commerce companies and logistics operators often need the ability to scale operations quickly, manufacturers place a stronger emphasis on long-term operational stability and security. As the market matures, lease agreements are generally becoming longer, with 10-year contracts now standard market practice across Western Europe. In contrast, some companies in Poland – concerned about geopolitical uncertainty – still prefer three- or five-year leases with early exit options.
Flexibility, however, does come at a cost. Shorter leases, early exit options or additional clauses involve higher costs or contractual penalties. For owners and developers, this means more complex portfolio management, but it can also provide a significant competitive advantage in an increasingly demanding market.
How is the industrial market likely to evolve in the years ahead?
The market is on course to become less homogeneous, both in terms of building standards and tenant expectations. Modern warehouses are no longer universal spaces – they are increasingly evolving into specialised business tools, designed to meet sector-specific requirements, processes and operating models.
Against this backdrop, professional advisory services and the ability to combine deep market expertise and a genuine understanding of clients’ operational processes are becoming ever more important. While the market may not necessarily grow faster, it is expected to become more selective, mature and discerning. This shift represents the key qualitative change in the years ahead.
