International advisory firm Cushman & Wakefield has summarized investor activity in the warehouse real estate market at the end of the third quarter of this year. The value of transactions exceeded EUR 820 million, marking an 11% year-on-year increase.
The market continues to show signs of recovery, with growing interest in portfolio and large-scale transactions supported by gradually improving liquidity. Investors remain selective, focusing mainly on value-add assets and properties with long-term leases, where attractive pricing outweighs classic core parameters. Meanwhile, top-tier assets with long WAULT and ambitious pricing expectations are currently facing challenges, comments Robert Tomaszewski, Associate, Capital Markets Poland, Cushman & Wakefield.
Prime yields remained stable at around 6.25%, with most transactions closing within the 6.50% to just under 7.00% range, as a robust supply of product on the market continues to balance pricing levels.
Stable appetite among banks
Banks’ appetite for financing the logistics sector remains steady. This is supported in part by growing interest in portfolio transactions, which provide financial institutions with greater comfort regarding future exit strategies. Banks pay particular attention to property location, lease structure and ESG-related parameters. The most sought-after projects are new developments in established logistics hubs, leased to several or more reputable tenants. The market is also seeing rising interest in Sale and Leaseback (S&LB) transactions, in which an owner sells the property to an investor and simultaneously leases it back on a long-term basis. This allows companies to unlock capital for other investment or operational purposes, explains Mira Kantor-Pikus, Partner, Equity, Debt & Alternative Investments, Capital Markets, Cushman & Wakefield.
Bank financing typically covers 50–55% of a property’s market value. Credit margins are closely linked to building quality, age, location, lease structure and the borrower’s reputation. For top assets, margins may be around 200 basis points. Development loans are available only when pre-lease levels are high—at least 45–50% of GLA—and with LTC ratios between 55% and 65%.
From a valuation perspective, one of the most significant factors affecting the worth of warehouse properties remains the duration of lease agreements. A longer WAULT means greater cash-flow stability and higher attractiveness in the eyes of investors. Valuation models also take into account that capitalization rates remain stable nationwide, with no clear signs of broad compression. The first indications of selective downward pressure on yields are emerging primarily in Warsaw and Gdańsk, where investors are willing to accept lower levels for prime properties featuring high ESG standards and long-term contracts, adds Marcin Malmon, Head of Valuations & Advisory, Cushman & Wakefield.
Financing and refinancing older warehouse assets remains possible but is becoming more selective. Banks increasingly require the preparation and implementation of decarbonization plans for such buildings, which may open the door to additional funding for energy-efficiency improvements and ESG compliance. The weighted average lease term should be significantly longer than the loan tenor.
Source: ceo.com.pl/rynek-magazynowy-odzyskuje-dynamike-wartosc-transakcji-osiaga-820-mln-eur-65346
