The Polish warehouse market continues to grow, although the pace is no longer as intense as it was in 2021 or 2022. The overall geopolitical situation, as well as our country’s strategic location for the stability of supply chains, ensure that both short- and long-term prospects for the development of this market remain positive.
In 2023, the total resources of modern warehouse-industrial spaces in Poland exceeded 30 million sq. meters, thereby making Poland one of the largest warehouse markets in the European Union, right after Germany and France. Developers’ heightened activity last year, in turn, resulted in a high level of new supply, which in the entire 2023 can reach approximately 4 million sq. meters. Despite being about 10% less than in 2022, this will be the second-highest result in the history of this market.
As a result, since the beginning of 2023, we have observed a significant increase in the vacancy rate (from 4.1% at the end of 2022 to 7.8% at the end of Q3 2023). Currently, almost 2.5 million sq. meters of warehouses are available for potential tenants in existing buildings. The largest availability was characterized by the markets of Central Poland, the Mazovia region, Upper, and Lower Silesia (together almost 1.7 million sq. meters- 70% of all vacancies). The increase in the vacancy rate brings balance to the market – tenants can choose from a larger number of offers, and developers have space for rent. This applies primarily to the main warehouse markets in Poland.
Nevertheless, financial market turmoil, associated, among others, with the persistently high costs of financing new projects, have resulted in a reduction in developer activity and a focus on the six main established warehouse markets in Poland. Almost 90% of all warehouse spaces under construction are concentrated in them. We expect this situation to continue in 2024.
On the tenant side, throughout 2023, we observed increasing pressure on optimizing both space and processes, seeking savings, as well as opportunities for business consolidation. As a result of the above actions, the volume of demand in 2023 should not exceed 5.5 million sq. meters and will be over 25% lower than in the record 2021 when over 7.3 million sq. meters were rented. In 2024, tenant activity should stabilize at a moderate level of 5-6 million sq. meters.
After a period of rent increases, the first signs of their stabilization were observed, and in some locations, especially those offering significant volumes of available space in existing buildings, price corrections occurred. In 2024, we will witness further stabilization of rent levels, with an increasingly strong focus on issues related to sustainable development and ESG, especially on energy efficiency, resource consumption, measurement, and reduction of carbon footprint.
Author: Jakub Kurek, Director of the Industrial and Warehouse Space Department at Newmark Poland
