Summary of the First Half of 2024 in the Logistics and Warehouse Space Market in Poland

According to data from Colliers, by the end of the first half of 2024, the available industrial and logistics space in Poland exceeded 33 million square meters. Despite predictions of a decline in gross demand, tenant activity was surprisingly high. Demand increased by 20% compared to the same period last year, reaching 2.7 million square meters. However, the vacancy rate in Poland continues to rise, reaching 8.2% by the end of June 2024. In response to the increased availability of space, developers have decided to limit the development of new projects.

Supply Leaders Remain Unchanged

The industrial and logistics space market, despite significant economic fluctuations recently, remains in very good condition. In terms of new warehouse space supply in the first two quarters of 2024, the Mazowieckie, Śląskie, and Łódzkie provinces continued to dominate. By the end of June 2024, their inventories amounted to 6.6 million square meters, 5.6 million square meters, and 4.6 million square meters, respectively. In the category of new supply, the Dolnośląskie, Pomorskie, and Mazowieckie provinces led, delivering 430,000 square meters, 240,000 square meters, and 230,000 square meters to the market, respectively. Among the largest completed projects during this period were the first phase of CTPark Gdańsk Port, covering 118,000 square meters, further phases of Panattoni Park Wrocław Logistics South Hub with 92,000 square meters, and GLP Warsaw V Logistics Centre with 86,000 square meters.

Significantly Fewer New Developments

By the end of June 2024, a total of 2 million square meters of modern warehouse space was under construction. Although a decline in the volume of space under development has been observed since mid-2022, it currently appears to be stabilizing at a level of 2 to 2.5 million square meters.

– It’s worth noting that in 2024, developers began construction of 800,000 square meters, which represents a significant, approximately 50% year-on-year decrease. Despite this, the volume of space under construction remains relatively high, similar to the first half of 2023. An increase in new investments could occur with the entry of a new developer or a decrease in the vacancy rate – explains Antoni Szwech, Senior Analyst in the Advisory and Market Research Department at Colliers.

The highest volume of space under construction by the end of June 2024 was recorded in the Dolnośląskie (570,000 square meters), Mazowieckie (410,000 square meters), and Łódzkie (320,000 square meters) provinces.

Demand Growth Contrary to Forecasts

In the first half of 2024, the Polish logistics and industrial real estate market experienced a noticeable increase in demand, despite the initial slowdown in activity observed in the first quarter. Gross demand from April to June 2024 nearly doubled compared to the previous quarter, leading to a result of 2.7 million square meters of leased space in the entire first half of the year.

– Despite moderate demand forecasts for 2024, the first half of the year turned out to be significantly better than the same period last year, as indicated by a 20% increase. Key leasing transactions registered during this period included LPP’s deal in Białe Błota near Bydgoszcz, LX Pantos in Pietrzykowice, and the expansion of an e-commerce player in the Panattoni Park Wrocław Logistics South Hub project – says Dominika Jędrak, Director of the Advisory and Market Research Department at Colliers. – An aspect that also indicates the market’s good condition is the still relatively high share of new leases in demand, accounting for 54% – adds Dominika Jędrak.

The most warehouse space was leased in the Dolnośląskie (525,000 square meters), Mazowieckie (510,000 square meters), and Śląskie (470,000 square meters) provinces. These regions maintain their position as the country’s main logistics centers, attracting the largest number of tenants, especially from the 3PL, retail, and e-commerce sectors.

Rent Stabilization

Since the beginning of 2022, both base and effective rent rates have seen significant increases. This was driven by factors such as rising fuel and construction material prices, higher financing costs, and deteriorating investment market sentiment. Currently, although the upward trend continues, its dynamics are much milder than during the peak period of 2022. The highest rates were recorded in Warsaw, where base rents ranged from 4.30 to as high as 7 euros per square meter, and effective rents from 4 to 6.50 euros per square meter. In other regional markets, base rents ranged from 3.10 to 5.90 euros per square meter, while effective rents ranged from 2.60 to 5.20 euros per square meter.

Increase in Vacancies

At the end of June 2024, the Polish logistics and industrial real estate market recorded a 1.6 percentage point increase in the vacancy rate compared to the same period last year. This means that in the first half of 2024, the vacancy rate reached 8.2%.

– The increase in the vacancy rate is mainly due to the significant volume of new supply delivered to the market, especially since the beginning of 2022. Currently, as much as 65% of available warehouse space is located in facilities completed between 2022 and 2024, indicating certain challenges related to the absorption of newly created spaces – says Maciej Chmielewski, Senior Partner, Industrial and Logistics Department at Colliers.

Infrastructure and Communication to Influence Further Market Development

A significant factor supporting the further development of the logistics and industrial market in Poland is the expansion of transport infrastructure. All modes of transport are currently undergoing intensive development. Particularly important are investments in the expansion and modernization of seaports in Gdańsk, Gdynia, Świnoujście, and Elbląg, aimed at increasing capacity and improving logistics services. The aviation sector, with the planned Central Transport Hub (CPK) and the development of regional airports such as Kraków-Balice, Lublin, and Katowice, will also gain importance, especially with the construction of new cargo terminals that will handle the growing demand for air freight.