Never before has so much new warehouse space been delivered in Poland in a six-month period. With 499,100 sqm of completions, the Warsaw region (zones 1 and 2) led the way in terms of new supply in the first half of 2023, followed by Upper Silesia (414,300 sqm), Western Poland (338,500 sqm) and Wrocław (316,900 sqm). By the end of June 2023, Poland’s total industrial and warehouse stock had surpassed 30.6 million sqm. The largest completions included Panattoni BTS Zalando Bydgoszcz (146,000 sqm), CTPark Iłowa (131,200 sqm) and Panattoni Park Wrocław Logistics South Hub (125,000 sqm).

Savills has observed that development activity slowed down in the last six months. At the end of the first half of 2023, there was approximately 2.13 million sqm under construction, down by 51% year-on-year. The highest concentration of new projects underway was in Warsaw, Central Poland and Wrocław.

“As economic headwinds persist, we expect new supply to remain constrained in the second half of 2023. We believe that they will, however, be short-term and the occupational market will continue to benefit from the trends that have shaped the industrial and warehouse landscape in the last decade. Although the macroeconomic outlook is full of challenges, key drivers of the sector’s growth remain unchanged for Poland, which accounts for 10% of the European logistics take-up”, says Katarzyna Pyś-Fabiańczyk, Head of the Industrial Services Hub, Savills.

Savills analysis shows that speculative construction will be particularly affected in the coming months, with new supply of such space expected to fall. The real estate adviser estimates that the total supply for 2023 will reach approximately 3.5 million sqm.

After years of robust take-up, the closing months of 2022 and the first half of 2023 saw weaker occupier demand for industrial and logistics space. Total take-up reached 2.25 million sqm, down by 39% compared to the first six months of 2022. It is worth noting, however, that the last two years witnessed record occupier activity, with leasing volumes 30-40% above pre-pandemic figures. This trend has been seen on all European markets as take-up has now returned to the pre-pandemic levels reported in 2018-2019 after a marked surge in demand.

“With Poland’s overall vacancy rate standing at 6.5% in 2023, rental growth is expected to slow further in most regions. Prime rental rates are, however, likely to edge up. Inflation has significantly pushed up total leasing costs including utility and service charges, forcing tenants to prioritise logistics operational efficiency. Limited land availability has, in turn, forced developers to invest in emerging markets. Due to high inflation, rising energy prices and climate requirements, sustainability and green energy will be a key priority for the industrial market in the years ahead, which will further intensify the already strong ESG trend”, concludes Katarzyna Pyś-Fabiańczyk, Savills.