In the first half of the year, the total gross demand in the warehouse market in Poland amounted to 2.6 million m² - the third best result for the first half of the year, right after the record years of 2021 and 2022. Despite a visible rebound in leasing, the vacancy rate in Poland grew for the sixth quarter in a row, reaching 8.1% in June 2024. However, in the second quarter, speculative construction activity slowed down (below one million m²), suggesting that the vacancy rate will soon start to decrease. JLL experts summarize the first half of the year in the warehouse market.
Improving environment in European markets
While geopolitical uncertainty and slow economic recovery continue to affect market participants, forecasts indicate growth prospects for key markets and sectors. "According to Oxford Economics, Poland is expected to outperform other European economies, with GDP growth accelerating from 2.5% in 2024 to 3.9% in 2025. The projected dynamics for the eurozone are more balanced, but still significant - GDP is expected to grow by 0.8% in 2024 and 1.7% in 2025. As price growth slows down, interest rate cuts are expected, paving the way for stabilization and greater predictability. However, it's worth remembering that the real estate market cycle lags behind the overall economy, and effects may only be visible after some time." - says Maciej Kotowski, Director, Research & Consultancy
Gradual return of the e-commerce sector in the Polish market
"Gross demand of over 2.6 million m² was the third best result in the first half of the year, second only to the records from 2021 and 2022. Moreover, this result exceeded the results of the same period last year by about 35%. However, it's worth noting that so far in 2024, the market has been largely driven by extensions of existing lease agreements, which accounted for about 40% of the total transaction volume. As a result, new demand was moderate, although still 16% higher than in the previous year." - adds Maciej Kotowski
"New demand observed in the analyzed period was largely dominated by retail chains, which accounted for 45% of the leased space. These results were further strengthened by the gradual return of activity in the e-commerce sector, which leased a total of about 100,000 m² in the first half of the year. The dynamics of logistics and manufacturing companies, on the other hand, mainly manifested in the form of renewals of existing contracts. Logistics operators extended contracts for nearly 500,000 m², which accounted for 48% of the total renegotiation volume. The continuation of leases is good news for the market. On one hand, it demonstrates the stable business of their users, and on the other, the good condition of older facilities." - says Tomasz Mika, Head of Industrial Agency
Demand again outside the Big Five - Kujawy and Lublin stand out
Although the Big Five markets remain the most active, the high results in the first half of the year were also influenced by other regions of Poland. They accounted for almost 25% of total new demand during this period, compared to just 10% in the first quarter alone. The regional markets of Kujawy and Lublin stood out on the map, where contracts for over 200,000 m² were signed in total. Nevertheless, the so-called Big Five accounted for as much as 1.2 million m² of new demand in Poland recorded in the first half of 2024. Warsaw and Upper Silesia were at the forefront, with almost 300,000 m² leased in each of these markets.
Investment market awaits prime transactions
In the first half of 2024, 12 transactions were concluded with a total value of about 300 million euros. A significant part of this volume was the sale of Panattoni Park Poznań XI to EQT Exeter for over 90 million euros. The purchased property is a fully commercialized complex of two buildings, with DHL Supply Chain and Arvato as tenants. The second largest transaction was the sale of two parks with a total area of 82,000 m², located about 15 km from the center of Warsaw (Warsaw West Parks), to Hillwood. Equally significant was the transfer of ownership of MDC2 Park Kraków South (90,000 m²) to the open investment fund Generali Real Estate Logistics Fund.
"In the first half of 2024, opportunistic, value-add, and core+ strategies still prevailed among active investors. The average size of transactions concluded oscillated around 25 million euros, which indicated limited demand for capital to increase exposure in our market. Due to the lack of transactional evidence in the segment of the best warehouse facilities, their valuation was largely based on market sentiment and expert indicators. In the second half of the year, we expect an improvement in the evidence of closed prime transactions. Nevertheless, at the end of June 2024, capitalization rates for the best-valued multi-let warehouses (5-year average lease) were estimated at 6.75% in the regions and 6.50% for Warsaw." – summarizes Sławomir Jędrzejewski, Head of Logistics Investment
