Spectacular net take-up of 3.5 million sqm at the end of Q3 was better than any other total for the first three quarters of a year. The Polish market was also one of the driving forces behind the record demand in Europe.
The dominance of the Big Five and the continued impact of e-commerce on demand
For another successive quarter, we have seen record-breaking results in Poland’s industrial market. The record net take-up of 3.5 million sqm at the end of Q3 could well be topped up by another 1.1 million sqm plus from contract renegotiations and extensions. The total take-up of 4.7 million sqm would be a 35% increase on the same period last year. This means that there will be another record set at the end of 2021,
says Tomasz Mika, Head of Industrial Poland, JLL.
Upper Silesia, the Warsaw area and Wrocław also recorded a very good third quarter, narrowing the gap between these three markets and Poznań. Almost one million sqm of space for logistics was leased outside the Big Five markets. The markets in the northern regions of Poland – Kujawy, Tri-City and Szczecin, where a total of over 550,000 sqm was leased, really stood out,
explains Maciej Kotowski, Senior Research Analyst, JLL.
Another 3.4 million sqm of industrial space under construction
The first three quarters saw record levels of development activity with 3.4 million sqm under construction at the end of September. In addition, it is worth noting that the positive sentiment is also reflected in the greater share of speculatively developed space. At the end of Q3 it was 43% compared to a 30% share at the end of 2020. That's almost 1.5 million sqm available for lease. Each of the four largest speculative projects exceed 50,000 sqm and are very likely to attract e-commerce players,
says Maciej Kotowski.
Rents up while vacancy rates down again
Currently, only 6.2% of existing industrial space in Poland remains vacant. Strong demand and a slightly smaller share of speculatively built space in 2020 led to another reduction in the vacancy rate. Total vacant space along with speculative developments under construction, meant 2.9 million sqm of stock was available at the end of September. However, it is worth noting that there are few large spaces available on the market, even though this format is most in demand,
explains Tomasz Mika.
Record prices and the second-best performance in Poland’s investment market history
Portfolio transactions continue to dominate the industrial investment market. Since the beginning of the year, assets with a total value of over 1.6 billion euro have changed hands. Huge investor interest combined with a shortage of prime product has resulted in prices rising to record levels. Moreover, the strong competition in the sector is expected to continue into next year, as illustrated by the aggressive bidding for ongoing projects,
comments Sławomir Jędrzejewski, Head of Industrial Investment, JLL.
