At the end of the third quarter of 2024, Poland’s total warehouse and industrial stock reached nearly 34.0 million sqm, marking a 9.3% increase year-on-year.

The new year-to-date supply surpassed 2.09 million sqm, reflecting a 33% decrease compared to the first nine months of 2023. Only 454,400 sqm of new warehouse and industrial space came on stream during the third quarter of 2024, down by nearly 14% year-on-year and by 42.2% from the second quarter of 2024. According to Newmark Polska, Poland’s warehouse and industrial market is expected to expand by around 3-3.5 million sqm this year.

“At the end of September 2024, just over 1.94 million sqm of warehouse and industrial space was under construction, down by 2.1% from the second quarter of 2024 and by over 22% year-on-year. The highest concentration of construction activity continues to be in Poland’s six largest industrial markets, which account for almost 85% of all projects underway. These are Mazovia, Upper Silesia, Central Poland, Lower Silesia, Greater Poland and Tricity. The third quarter saw development activity gain momentum in Western Pomerania, with the stock under construction reaching nearly 115,000 sqm, the highest volume since the second quarter of 2022”, says Jakub Kurek, Head of Industrial and Warehouse, Newmark Polska.

Occupier activity slowed slightly during the third quarter of 2024 following a strong rebound in the warehouse and industrial leasing market during the second quarter, which saw more than 1.72 million sqm of transactions. Total take-up for the third quarter was close to 1.14 million sqm, marking a decrease of 34% quarter-on-quarter and nearly 24% year-on-year. Transaction volume for the period January-September 2024 totalled more than 3.81 million sqm, up by 2.8% compared to the same period last year.

“The structure of demand in the first three quarters of 2024 was dominated by new leases, including contracts for BTS projects, which accounted for 55% of total take-up. Renewals and expansions followed, making up 38% and 7% respectively. Additionally, it is worth noting that a total of 195,300 sqm was transacted under shorter leases of up to one year”, adds Jakub Kurek.

The second quarter of 2024 was not only the strongest leasing quarter of the year to date but also recorded the largest lettings during the period between January and end-September. These included a confidential e-retailer’s lease of 126,000 sqm in Panattoni Park Wrocław Logistics South Hub and LPP Logistics’ lease of a BTS facility spanning nearly 104,000 sqm in Bydgoszcz Białe Błota Logistics Centre.

At the end of September 2024, Poland’s overall vacancy rate stood at 8.0%, marking a decrease of 0.3 pp quarter-on-quarter but an increase of 0.2 pp year-on-year. Despite a slight decline in warehouse availability in standing buildings – down by nearly 65,000 sqm compared to the second quarter of 2024 – vacant stock at the end of the third quarter totalled more than 2.73 million sqm, the third-highest volume in the history of the Polish industrial market. By contrast, projects in the pipeline offered nearly 910,000 sqm of warehouse and industrial space for lease.

“The period between June and the end of September 2024 marked another consecutive quarter of prime warehouse and industrial rents remaining relatively stable in the key Polish industrial markets. In locations with significant vacancy rates, tenants are more likely to negotiate lower rental rates or secure attractive lease incentives. By contrast, developers of warehouses featuring energy-saving and sustainable solutions are less willing to make concessions. At the end of September 2024, the highest rents were in Warsaw (zone 1), Pomerania and Lesser Poland”, says Agnieszka Giermakowska, Research & Advisory Director, ESG Lead, Newmark Polska.