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Stability at the center of change - Polish warehouse market in Q1 2025

Polish Warehouse Market in 2024: Stable Growth Despite Economic Challenges

Rynek magazynowy w Polsce Q1-Q3 2024: Oznaki ożywienia przy utrzymującej się ostrożności

The Industrial Market in Poland Q1-Q3 2024: Signs of Recovery Amid Ongoing Caution

Despite a challenging macroeconomic environment, the Polish warehouse market maintains good condition. Although new demand remains limited, renegotiations and lease renewals in the first 6 months of this year reached a record 1.6 million sqm. Investment market data is also encouraging – during this period, properties worth nearly 700 million euros changed owners. Experts from advisory firm JLL summarize the first half of 2025 on the domestic industrial real estate market.&nbsp; The first half of 2025 was a time of limited activity on the European warehouse and logistics market. From January to June, a total of 11 million sqm of space was leased on the Old Continent, which is a result approximately 20% lower than the 5-year average for this period.&nbsp;Persistently high financing costs and geopolitical uncertainties mean that in the short term, tenants are cautiously approaching decisions about potential expansion. Developers are also taking a wait-and-see position - a fairly high vacancy rate (6%) causes them to approach starting new projects with reserve. Against the backdrop of Europe struggling with economic slowdown, Poland stands out decidedly positively when it comes to long-term economic forecasts. According to Oxford Economics, economic growth in our country will reach 3.3% in 2025 and 3.8% in 2026. These values significantly exceed estimates for the eurozone of 1.1% and 1.5% respectively. According to JLL experts, temporary investment limitations will be balanced by favorable, long-term fundamentals of stable growth and economic development. Demand: record number of renewalsDuring the first six months of the current year, net demand for warehouses in Poland amounted to 1.36 million sqm. This result - 17% smaller than in the analogous period last year - reflects the general trend from the European market. However, it should be emphasized that during this period, many tenants decided to extend existing contracts. Renegotiations in the first half of 2025 totalled 1.6 million sqm - an unprecedented result in the history of our market. Adding demand for new space and lease renewals, we get gross demand worth almost 3 million sqm, which is only 6% smaller than in the record first half of 2021.'The historically largest volume of renewals is the result of companies' caution in uncertain times, but also a natural consequence of expiring contracts concluded in the record years 2021-2022. Sale &amp; leaseback transactions are also becoming increasingly important, enabling companies to release capital from real estate. Thanks to this, total demand for warehouse space remained close to historical records, which shows that the Polish warehouse market remains exceptionally resistant to more difficult economic conditions,' comments Mateusz Iłowiecki, Director, Industrial Agency, JLL.&nbsp;&nbsp; &nbsp;Vacancy: high fragmentationThe percentage of unleased space remained relatively stable and at the end of the second quarter amounted to approximately 8.1%, which translated to 2.95 million sqm of vacant warehouses. However, it's worth noting that available "ready-to-move" spaces are very dispersed across different facilities and modules - at the end of Q2 2025, only 15 individual modules with an area of 30,000 sqm and larger were available on the market. The availability of ready space is also highly differentiated in terms of location - for example, in the largest markets, the most vacancies were recorded in Wrocław (10.3%) and Warsaw (over 6%), while in smaller centers such as Kraków, Szczecin, Opole, Olsztyn, or Białystok, this percentage was less than 3.5%.&nbsp; &nbsp;Supply: 1.47 million sqm under constructionAt the end of June 2025, the Polish market had a total of 36.6 million sqm of existing warehouse space. In the first half of the year, it expanded by another 1.15 million sqm, which is a result similar to new supply in the analogous period of last year. The most new space was delivered in Wrocław and Upper Silesia, where developers completed 344,000 and 256,000 sqm respectively. Additionally, both the Warsaw and Szczecin markets recorded new supply exceeding 100,000 sqm.&nbsp;&nbsp; ‘We also observe stability when it comes to new projects started by developers. At the end of June 2025, the total area of projects under construction was 1.47 million sqm, representing approximately 7% growth compared to the end of Q1. Speculative activity concerned a total of over 600,000 sqm, also recording minimal growth. The most new space, over 400,000 sqm, is currently being built in Warsaw. Results above 150,000 sqm under construction were also recorded by Upper Silesia, Tri-City, and Central Poland. Developer activity decreased in Wrocław, which is struggling with a double-digit vacancy rate,’ &nbsp;says Mateusz Polkowski, Head of Research &amp; Consultancy, JLL.&nbsp; &nbsp;Rents: without major changesLimited development activity translated into stabilization of rental rates, which did not undergo major changes in the first half of 2025. Rents for suburban logistics parks within the "Big Five" markets (Warsaw, Upper Silesia, Central Poland, Wrocław, and Poznań) ranged from 3.5 to 5.5 euros per square meter per month. Urban locations maintained rates up to 8 euros per square meter per month, although in selected, best projects in Warsaw they were even higher.&nbsp; &nbsp;Investment market: significant increase in interest&nbsp;The warehouse sector remains the favorite destination for entities interested in investing in the Polish commercial real estate market. In the first half of 2025, the volume of industrial investments amounted to 694 million euros, which was a result 140% larger compared to the analogous period last year. It was also the best result for the first half-year since 2021.&nbsp;Notably, this amount does not include the large-scale international corporate acquisition of GLP Capital Partners Limited by Ares Management Corporation, which affected the ownership structure of numerous industrial parks worldwide, including assets in Poland.&nbsp;‘A trend that was strongly marked this year is the growing number of sale &amp; leaseback transactions. Both investors and tenants eagerly use them, as in conditions of expensive financing they seek ways to quickly release capital from owned assets. Such contracts, through long-term lease commitments, guarantee stability of cash flows,’ &nbsp;comments Michał Reszka, Senior Consultant, Capital Markets, JLL.An excellent example is the record transaction in which Eko Okna sold two modern facilities with a total area of 264,000 sqm to Realty Income Corporation. This was the largest sale &amp; leaseback deal in the history of all Central and Eastern Europe. The second largest transaction was the acquisition of the LPP distribution center in Bydgoszcz by Reico Long Lease Fund. Equally significant was another transaction of this type, covering four industrial assets located in Gliwice, Stanowice, Rybnik, and Gorzyce. They were acquired by Adventum International, a Hungarian investor who recently launched its subfund focused on industrial investments. &nbsp;

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