According to “Occupier Insight – Industrial and Warehouse Market Q1 2021”, a report prepared by Cresa, gross industrial and warehouse take-up climbed to 1.6 million sqm in the first quarter of this year, representing an increase of 51% compared to the first three months of last year. This result accounts for 46% of the annual average for the last five years and marks a record quarter in terms of leasing activity.
Poland’s industrial and warehouse stock reached 21.5 million sqm in Q1 2021, representing a 12.9% increase over the same period last year. New warehouse supply hit 766 200 sqm, the third-highest figure on record and up by 79% in the same period last year. The largest volumes of new space were delivered in Upper Silesia (249 300 sqm) and Masovia (149 300 sqm). Close to 80% of Poland’s warehouse and industrial space is concentrated in five provinces: Masovia, Upper Silesia, Łódzkie, Lower Silesia and Greater Poland.
“At the end of March 2021, Poland’s development pipeline stood at more than 2.5 million sqm, 72.3% of which has been secured under pre-lets. This is confirmation of the continued positive sentiment among both developers and tenants. The highest concentration of development activity is in Greater Poland and Łódzkie,” says Tom Listowski, Partner, Head of Industrial & Warehouse Department for Central and Eastern Europe at Cresa.
A total of 1.6 million sqm (excluding short-term leases) was transacted in the first three months of this year, up by 50.8% on the same period last year. This result accounts for 46% of the annual average for the last five years and marks a record quarter in terms of leasing activity. New leases made up 66% of the leasing volume, followed by renegotiations (29%) and expansions (5%). The strongest leasing activity was in Greater Poland (382 300 sqm) and Masovia (326 600 sqm).
The overall vacancy rate was down by 0.3 pp compared to the previous quarter at 6.6%, its lowest since the second quarter of 2019, which translates into 1.4 million sqm of vacant warehouse and industrial space. The percentage of unoccupied space remains stable despite strong supply levels, with absorption at 776 900 sqm. The highest vacancy rates were in Świętokrzyskie (18.9%) and Upper Silesia (9.7%), while the Białystok and Lublin regions reported no vacant space.
“Recent industrial investment transactions have traded around 5.5-6% and even sharper (sub 5%) for long lease terms (10 years +) and single occupancy assets with strong covenants. In multi-tenant buildings with shorter leases in core locations yields have been compressing and we expect sub 5% to be achievable in 2021 in locations such as Warsaw,” says Iga Kraśniewska, Research Manager at Cresa Poland.
