The warehouse market in Krakow is dynamically developing, despite many challenges, and has great potential for the future. For the first time in 2024, the Lesser Poland (Małopolska) region exceeded supply of over one million sqm, with an additional 61,000 sqm under construction at the end of the first half of the year. Krakow is not only joining the most important logistics locations on the warehouse map of Poland, but is also becoming the strategic choice for manufacturing companies, which appreciate the strong base of university graduates with technical profiles and the availability of workers from towns around the city. AXI IMMO, a consulting firm, prepared an analysis of the Krakow warehouse market.
Over the past few years, the Krakow warehouse market has been developing dynamically. The total resources of industrial and logistics space in the Malopolska region have increased by 171% (June 2024) to 1.1 million sqm over the last 5 years. According to estimates by AXI IMMO, the historic high of achieving one million square meters was observed at the end of 2023. In the first half of 2024, 131,000 sqm were delivered to the Krakow warehouse market, with another 61,000 sqm remaining under construction. As of the end of June 2024, the GLP Krakow III Logistics Centre (56,300 sqm), another hall in the MDC2 Park Krakow South (35,600 sqm), and City Logistics Krakow Airport II (21,600 sqm) were already commissioned. The Malopolska warehouse market has long been characterized by one of the lowest vacancy rates (at the end of H1 2024 – 6.1%, national average – 8.3%). At the end of June, about 69,000 sqm of industrial and logistics space was available, of which nearly 50,000 sqm were located in two halls.
Marta Nowik, Director at the Industrial and Logistics Space Department, Director of AXI IMMO’s Krakow branch, explains: “The rapid development of tenants in the Krakow region and its surroundings was hampered by the persistently low vacancy rate in the region. Nevertheless, developers, seeing a high demand for warehouse space, have delivered almost 300 thousand sqm in the last two years. This fact meant that a large group of local tenants, within the framework of consolidation, modernization or development, obtained the much-anticipated access to new, modern halls. The increasing demand for warehouse space means that in the coming quarters we can expect news about the start of further investments.”
In 2023, lease agreements were signed for a total of 232,000 sqm in the Malopolska region, a result 4% better compared to 2022. The first half of 2024 closed with a result of 43,000 sqm due to the low availability of free space. Despite the lower base, there is a great interest in leasing, which indicates the good condition of the sector in the region.
Marta Nowik, says: “The Malopolska warehouse market had a record 2023, both in terms of demand and supply. Although the supply is still far from the big five of the warehouse market, there is no doubt that Krakow has joined the most important industrial and logistics locations in the country in the last three years.”
About 10% of warehouse resources are located within the city’s administrative borders. Most logistics and production is located in the area around Skawina near Krakow, the airport area in Balice, and also in the eastern communities around Krakow – along the A4 motorway. Warehouse locations in the Krakow region also enable efficient servicing of demand in Ukraine, making them strategically important in the context of regional and cross-border logistics and distribution.
“Important factors for the development of this market are good communication, availability of investment land and qualified employees. Thanks to renowned higher education institutions, such as the Krakow University of Technology and the AGH University of Science and Technology, companies have access to qualified engineers and other technical specialists who successfully develop R&D departments, automate production and logistics processes, which is increasingly important due to rising costs in recent years. Also, the S7 road will be completed this year, which will certainly contribute to the development potential of the northern areas of the region,” explains Marta Nowik.
The warehouse market in Krakow has its own challenges, such as relatively low availability of land and high fragmentation, and competition from larger Upper Silesian market. However, recent years show that improved infrastructure, better cooperation with municipalities and relatively high human potential mean that many companies, including those demanding highly qualified personnel, are investing in the Krakow region.
“The example of a company that decided to enter the local market due to these factors is a German company operating in the construction industry. As part of a new investment, it created a R&D department in the Krakow region,” emphasizes an expert from AXI IMMO.
Source: https://ceo.com.pl/krakow-magazynowym-milionerem-rynek-magazynowy-z-rekordowym-wzrostem-63647
