The latest Cresa Poland „Occupier Insight - Industrial and warehouse market in Poland Q1-Q3 2021”.
At the end of September, Poland’s total industrial stock reached 23.0 million sqm, up by 13% year-on-year. New warehouse supply year to date amounted to almost 2.3 million sqm, with 1.1 million sqm delivered in Q3, which is the largest new supply volume ever recorded on the Polish market in one quarter. The largest completions in Q3 were: BTS facility for Amazon in Świebodzin for more than 203,000 sqm, Hillwood Rokitno (112,000 sqm) and a BTS for DHL Supply Chain in Żerniki (Panattoni Park Poznań) for 108,000 sqm.
Despite availability constraints and rising prices of building materials, the construction activity in Poland not only remains at a high level but continues to grow from quarter to quarter. As of September 2021, almost 3.7 million sqm of warehouse and industrial space was under construction across Poland. 57% of that space was already secured with lease agreements. The three largest projects underway are: GLP Lędziny Logistics Centre, Hillwood Bydgoszcz and P3 Poznań II.
The volume of transaction activity amounted to almost 4.9 million sqm in the period from January to September 2021, which is a 33% increase compared to the corresponding period in 2020. Q3 2021 alone witnessed occupier activity at a level of 1.47 million sqm. New lease agreements accounted for 64% of total take-up while renegotiations made up 23%. BTS leases and expansions accounted for 8% and 5%, respectively. The largest transactions signed in Q3 2021 were: the lease for 104,000 sqm in Hillwood Bydgoszcz by an undisclosed tenant from the e-commerce sector and 70,000 sqm in Logistic City – Piotrków Distribution Center by JYSK.
At the end of September 2021, the vacancy rate stood at 4.8%, down by 3.7 pp on the same period last year and down by 1.0 pp on Q2 2021. The Silesia, Mazovia and Central Poland regions currently offer the largest availability of vacant warehouse and industrial space in Poland (318,600 sqm, 240,100 sqm and 221,100 sqm respectively).
During Q1-Q3 2021 the industrial and warehouse market was still attracting the high interest from the investors. The prime yields for multi-let properties near Warsaw dropped significantly below 5%, reaching 4.4% for the best assets. Where, multi-let assets located near major cities in regional markets quote yields at the level of 5.25-5.50%. Looking ahead, further yield compression for this type of assets is expected, so transactions with the 5% yields or even lower are to be seen within the next 12 months.
