Colliers/7R report analyses impacts on Polish logistics

The double hit of covid followed by the war in Ukraine was very unusual set of macro-economic events, according to Łukasz Jachna, chief capital markets officer and board member of Polish property company 7R.

He said that when these events are also considered alongside the increased level of inflation and rising interest rates it is vital to accurately assess the implications. “We need to be very careful and look for certain macro trends and do so accurately to make sure that we are on the right track,” Jachna told Real Asset Insight’s Richard Betts.

Jachna says that 7R has a wide perspective, being able to see what is happening in the macro view while also receiving direct feedback from tenants on what is happening and their operational difficulties.

7R recently published a research report jointly with Colliers that documents the current situation. The war in Ukraine has exacerbated inflation by pushing up oil and gas prices, additional to price increases occurring due to energy transformation. Labour supply shortages are adding to the pressure.

There are positives for the logistics market and while the situation has made US capital more cautious, that from Europe is still active and cap rates are still relatively competitive.

High inflation will also be reflected advantageously by indexed rents, those holding property with leverage are closely watching the increase in financing costs.

But Jachna added, “we need to be very cautious because the whole logistics sector is also driven by transportation costs.”

There are an increasing number of reasons that might make inflation not just a short-term phenomenon, he added.