“The Polish warehouse and industrial market continue its strong growth momentum, but macroeconomic headwinds and the restricted availability of finance for new projects have slowed development activity and speculative construction in particular,” says Jakub Kurek, Head of Industrial and Warehouse, Newmark Polska. “In addition, tenants - in their quest for cost-cutting - are being increasingly driven to consider the option of staying on in their current locations. Meanwhile, Poland’s overall vacancy rate edged up throughout the third quarter of 2022”, added the expert.

At the end of September 2022, the volume of warehouse and industrial space under construction amounted to over 3.98 million sqm, down by 8.5% over the quarter but up by close to 7% on the third quarter of 2021. The past quarter was another in a row with a slowdown in development activity and speculative construction in particular – this was due to macroeconomic headwinds and fairly high costs of financing for new warehouse and industrial projects.

“Occupier demand for warehouse space continues to hold firm. Total leasing activity for the first nine months of 2022 surpassed 5.3 million sqm, up by 8.7% year-on-year. The third quarter of 2022 saw over 1.5 million sqm transacted, which represented a decrease of close to 33% over the quarter. Net warehouse and industrial take-up came to 3.75 million sqm, accounting for 70% of gross take-up”, says Agnieszka Giermakowska, Research & Advisory Director, Newmark Polska.

New lease agreements accounted for 63% of the total warehouse take-up in the first three quarters of 2022, followed by renewals and expansions which made up 29.6% and 7.4%, respectively. Renewals saw their share of the total take-up rise from 26.6% in Q1 to 38.3% in Q3, indicating a growing occupier focus on cost-cutting in current locations. It is also worth noting that 293,300 sqm was transacted in January-September 2022 under shorter leases of up to one year.

The largest transactions of the first three quarters of 2022 included VidaXL’s renewal of its lease for 123,000 sqm in VidaXL BTS Września, Panattoni’s BTS project with an area of 103,000 sqm in Tricity for a confidential e-retailer, Exeter’s BTS facility comprising 100,000 sqm for a confidential retailer in Świebodzin and BestSecret’s 90,000 sqm lease in Panattoni Park Sulechów III.

At the end of September 2022, Poland’s overall vacancy rate stood at 4.1%, up by 1.0 pp over the quarter but down by 0.7 pp year-on-year. Vacant stock comprised 1.12 million sqm in existing buildings and 1,945,000 sqm in projects underway. The strongest quarterly growth in vacancies was in Lower Silesia - of 3.7 pp, or close to 142,500 sqm.

Warehouse rental levels which rose by around 15%-20% in the year to date and varied by location are beginning to plateau but are likely to edge up in the most sought-after locations. At the end of the third quarter of 2022, the highest warehouse rents were in Warsaw (zone 1).