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‘Construction frenzy’ response to Polish industrial demand

In the first quarter of 2021 Poland’s industrial market saw gross take-up totalling 1.6 million sq m which JLL describes as the best ever quarterly result for the sector.

Maciej Kotowski

Meanwhile, the firm says, developers are keeping pace and there is 2.3 million sq m of industrial space under construction.

Net demand (new deals and expansions) accounted for 1.1 million sq m with courier firms and third-party logistics operators responsible for almost half of the figure, followed by manufacturers (28%) and retailers (23%).

The ‘big five’ markets dominated – Poznań, Wrocław, Upper Silesia, Central Poland and Warsaw – accounting for 900,000 sq m of net takeup. “After a period of moderate results, it was Poznań, which led the way. In fact, Poznań’s net take-up in the first three months of 2021 was even higher than 2013’s record breaking performance, when Amazon entered the market”, said JLL senior research analyst Maciej Kotowski.

Tomasz Mika

He added demand spans the different asset types. “from large big-box locations in the vicinity of major cities, emerging regional hubs, and BTS developments to city logistic schemes.”

About 745,000 sq m of new industrial space was completed in the first quarter taking total stock to 21.4 million sq m. Much of this is located in Upper Silesia, Warsaw Suburbs and Tri-City, with 500,000 sq m delivered in these three markets.

Sławomir Jędrzejewski

“The robust demand and positive expectations have been driving a construction frenzy in Poland. The market is powering ahead with the under-construction pipeline, at various stages of construction, totalling 2.3 million sq m. It means that in the Q1 alone, developers launched new developments totalling1.2 million sq m. Almost 70% had already been secured with pre-let contracts,” said JLL’s head of industrial, Poland, Tomasz Mika.

Rents have remained relatively stable. Warsaw Inner City and other urban locations are the most expensive markets in Poland. In Warsaw, headline rents range from €4.3 to €5.25per sq m per month.

Investment turnover totalled €391 million and was the second best-ever result for a first quarter, JLL said. The largest transaction was the acquisition of warehouse schemes by Ares Group from Panattoni. Regarding single-asset deals, one of the most significant was the sale of BTS Castorama in Stryków by Tritax to Savills IM”, says Sławomir Jędrzejewski, Senior Director, Capital Markets, JLL.

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