Poland Industrial Market Report - Q4 2016_JLL

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Poland’s Industrial Market
in 2016
February 2017
2 Poland’s Industrial Market Report in 2016
Contents
Introduction .................................................................................................................................................. 3
Tenant Activity .............................................................................................................................................. 4
Availability of Warehouse Space ........................................................................................................................ 4
Developer Activity .......................................................................................................................................... 7
Rents .......................................................................................................................................................... 9
Industrial Land ............................................................................................................................................ 10
Investment Market ....................................................................................................................................... 11
Regional Analysis ........................................................................................................................................ 12
Warsaw ..................................................................................................................................................... 13
Upper Silesia .............................................................................................................................................. 14
Poznań ..................................................................................................................................................... 15
Central Poland ............................................................................................................................................ 16
Wrocław .................................................................................................................................................... 17
Northern Poland .......................................................................................................................................... 18
Kraków ...................................................................................................................................................... 19
Eastern Poland ........................................................................................................................................... 20
Summary and Outlook for 2017 ....................................................................................................................... 21
Transactions ............................................................................................................................................... 22
Market Practice for Leasing or Acquiring Industrial Space ...................................................................................... 23
Poland’s Industrial Market Report in 2016 3
Introduction
Demand was at historically high levels, with gross take-up
at 3.0 million m². There is a significant and well pre-leased
new development pipeline.
In 2016, 2 million m² threshold was crossed after just the first
three quarters, and ultimately reached more than 3 million m² of
Considerable falls as compared to mid-2016 were recorded in the
Warsaw Suburbs (from 10.1% to 5.5%) and in Central Poland
gross take-up by the end of the year. In terms of net take-up, the
previous record of 1.5 million m2 registered in 2008 was far
(from 4.6% to 3.0%). Significant surges in vacancy were seen in
Poznań (from 4.6% to 7.2%) and Kraków (from 1.3% to 9.0%).
exceeded in 2016, as the year managed a total of 2.2 million m².
Despite the completion of 1.2 million m² of new industrial and
warehouse space during the last four quarters, available space
Construction activity remained buoyant last year, as new
warehouse and industrial stock increased by 1.2 million m² (in
2015 it was 1 million m2) and reached 11.2 million m2 at the end
of the year. Developers were primarily focused on the markets of
Upper Silesia (where 0.24 million m² of new stock was delivered),
the Warsaw Suburbs (0.21 million m²), Central Poland (0.19
million m²) and Poznań (0.18 million m²).
At the start of 2017 there were 50 projects under construction
across the country. A total of nearly 1.45 million m² of new
warehouse space will be delivered over the next few months. In
terms of current construction activity, the leading position is,
surprisingly, held by Szczecin (0.31 million m² in four projects),
followed by the very active Warsaw Suburbs (0.30 million m² in
nine projects) and Poznań (0.22 million m² in eight projects).
Such a large pipeline of new stock might raise concerns about
the potential risk of an increase in vacancy rates; however, such
an increase is not likely, as 75% of the under-construction stock
is already secured by lease agreements (compared to 65% at the
end of 2015). Therefore, only the remaining 0.37 million m² might
be delivered speculatively in H1 2017. Given the fact that that
stock is being developed by experienced market players
(Panattoni, Goodman and MLP), we believe that vacancy rates
may be affected only slightly in the next few quarters.
In Q2 2016 a drop (from 6.7% to 6.1%) in the national vacancy
rate was observed; the rate stabilized in H2 at 6.1–6.2%.
increased only by 83,700 m², to reach 686,000 m² as at the end
of Q4 2016.
Except for Warsaw Inner City and Wrocław, where headline rents
fell by €0.2 / m² / month, in all regions leasing costs remained
stable. In some markets, for example Szczecin, the Warsaw
Suburbs and Upper Silesia, rents have remained fairly stable for
more than two years. Effective rents remained largely unchanged
during 2016.
In 2016 the warehouse investment market reported €769 million
in transactions (compared to €473 million in 2015), in 14 deals.
Six deals were portfolio sales and one was a platform disposal
(P3), accounting for almost 82% of the total 2016 industrial
investment volume. Last year also saw the reaffirmation of prime
warehouse yields at below 6.75%, with the best-located,
exceptional, long-leased assets trading at well below 6.00%.
4 Poland’s Industrial Market Report in 2016
Tenant Activity
Demand was at a historical high for the fourth year in a row,
with gross demand at 3.0 million m².
Tenant demand in 2016 was robust and far exceeded the already
Interestingly, over the last couple of years Podkarpacie and
very strong performance from 2015, when 2.2 million m2 of gross
take-up and 1.47 million m² of net take-up (0.75 million m² of
Lublin were on the right track to grow beyond the size of small
emerging markets, due mainly to extensive infrastructure
which was renewals) were recorded. Last year gross take-up was
up by 37%, to 3.0 million m², and net take-up did even better: an
improvements. In 2016 these markets were overshadowed by the
two other emerging regions of Szczecin and Kujawy (formerly
increase of 48%, to 2.2 million m².
known as Toruń / Bydgoszcz), which performed quite well on
both the demand and supply sides.
Chart 1: Demand for warehouse space in 2005–2016 (m2)
Chart 2: Take-up in regions in 2016 (m2)
3 500 000
8,0%
2 500 000
6,0%
1 500 000
4,0%
500 000
2,0%
-500 000
0,0%
Net-demand
Lease renewals
Podkarpacie
Lublin
Warsaw Inner City
Tri-City
Kraków
Kujawy
Central Poland
Wrocław
Szczecin
Poznań
Upper Silesia
Warsaw Suburbs
GDP Growth (%)
Source: JLL, warehousefinder.pl, Q4 2016, Oxford Economics, Jan 2017
In 2016 Warsaw Suburbs was the most sought-after region in the
Net-demand
Lease-renewals
Source: JLL, warehousefinder.pl Q4 2016
country, with transactions there totalling 745,000 m². Traditionally
high demand was also seen in other ‘millionaire’ markets (i.e.
Traditionally, companies classified as retailers and logistics
operators have been the most active market players on the
those with stock in excess of 1 million m²). Interestingly, on the
back of the transactions by two e-commerce giants (Amazon and
demand side. In 2016, they jointly accounted for 59% of total net
take-up. The share of logistics operators increased slightly, to
Zalando), which signed two leasing transactions for BTS projects
totalling 291,000 m², the Szczecin region recorded a noteworthy
30% (29% in 2015). Retailers are also gradually increasing their
share, from 23% in 2015 to 29% in 2016. Gradual progress is
rise in tenant activity.
also shown by light manufacturing, which has grown constantly
since 2011, from 44,000 m² to 235,000 m² last year (11%). It is
Strong activity was reflected by the increase in new leases and
tenant expansions across the major markets. Only four, mainly
emerging, regions showed decline in net demand year on year:
Warsaw Inner City (down 24%), Central Poland (down 33%),
Podkarpacie (down 63%) and Lublin (down 25%).
worth noting the steady growth over the last three years of the
automotive sector, with a record net take-up of 183,000 m² (8%)
in 2016 (155,000 m² in 2015).
Chart 3: Net take-up by sector in 2016
Food
3%
FMCG
1%
Electronics
2%
Automotive
8%
Logistics
operator
30%
Light
manufacturing
11%
Other
16%
Source: JLL, warehousefinder.pl Q4 2016
Retailers
29%
Gross demand for industrial and logistics warehouse space in Poland in 2016
Source: JLL Q4 2016
6 Poland’s Industrial Market Report in 2016
Availability of Warehouse Space
The overall vacancy rate has remained relatively stable. Among the
major regions there was a large fall in vacancy rates in the Warsaw
Suburbs, while Poznań saw a sharp increase of empty space.
Over the last twelve months the vacancy rate remained relatively
Among the major regions, Warsaw saw a fall in available space of
stable, at slightly above 6% (6.2% in Q4 2015, 6.1% in Q2 2016 and
63,400 m² despite the large amount of completions (217,500 m²) in
in Q4 2016). Despite 1.2 million m² of new space being delivered,
2016. The Warsaw Suburbs, with a vacancy rate of just 5.5%, shows
the overall vacancy rate was not markedly affected, as a significant
the best result in its history. On the other hand, Poznań had a
number of those projects were delivered in the BTS (build-to-suit)
vacancy rate of only 1.9% at the end of 2015 but demand there was
formula. Total available space was 0.68 million m² at the end of
not able to entirely absorb the amount delivered (177,300 m²), which
2016.
resulted in a sharp increase, to 7.2%. A similar situation was seen in
The present volume of new warehouse space under construction
(1.45 million m²) looks impressive, but we saw comparable strong
market activity almost ten years ago. However, current market
demand has strong support from the combination of internal and
external demand for storage and production space.
GDP growth of ca. 3% p.a. and the gradually increasing importance
of Poland as an e-commerce hub for Western Europe (Amazon and
Zalando) are also key factors stimulating the growth of demand.
This, coupled with the lowest rental costs in Europe and the low
interest rates which stimulate the investment market, paints a picture
of Poland being one of the most sought-after industrial and logistics
Kraków, where insufficient demand pushed the vacancy rate over
the last year to 9.0%. In the Tri-City, for the second year in a row,
more than 10% of space was vacant. However, that space is mainly
the result of one large project with vacant space of slightly over
20,000 m².
Also worth noting is the fact that stable, or in some regions even
declining, rents support rapidly growing demand and modern
warehouse and production space is becoming more affordable to
new companies entering the market and to those relocating from old
buildings which are not covered by our industrial market statistics
(e.g. class B or class C post-industrial facilities).
locations on the continent.
Almost 1.1 million m² (75%) of stock under construction is already
secured by lease agreements. The largest amount of speculative
space is being built in Warsaw Suburbs, but continuous strong
demand makes us confident that that space will be absorbed quickly.
Chart 4: Vacancy rates for Poland in 2005–2016 (%)
20,0%
15,0%
Chart 5: Vacancy rate by region in Q4 2015 & Q4 2016 (%)
Tri-City
Warsaw
Upper Silesia
Wrocław
Szczecin
Central Poland
Poznań
Kraków
Poland
10,0%
0%
5%
Q4 2015
5,0%
Source: JLL, warehousefinder.pl Q4 2016
0,0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: JLL, warehousefinder.pl Q4 2016
10%
Q4 2016
15%
Poland’s Industrial Market Report in 2016 7
Developer Activity
The leading developer strengthened its construction activity
in 2016 and dominates the pipeline for H1 2017.
At the end of 2016 the total stock on the Polish industrial market
stood at 11.2 million m2 and had grown year on year by over 1.2
growth expected for 2017 might be even higher, as the projects
already under construction with planned delivery in Q1–Q3 2017
million m² (in 2015 by 1 million m2). Panattoni is growing rapidly
and significantly increased its development activity across the
equate to 13% of current stock).
country. In 2016 this firm delivered 775,000 m² of new stock
(443,000 m² in 2015). Its major competitors did not manage to
Despite improvements in road infrastructure, emerging locations
are having difficulty in speeding up their development and
better their results from 2015: Goodman completed
121,000 m² (compared to 222,000 m² in 2015), SEGRO 84,000
gaining recognizable levels of stock as it was the case within the
last 2-3 years. The majority of them are now seeing slowdowns
m² (87,000 m² in 2015) and Prologis delivered 50,000 m² (46,000
m² in 2015).
after a quick period of initial growth (e.g. Lublin, Podkarpacie, the
Tri-City and Kraków).
In the middle of 2016 the pipeline stood at 742,000 m², (vs.
Chart 7: Existing warehouse space by region in 2016 (m2)
774,000 m² at the end of 2015); however, 1.45 million m² of
planned space was announced in the second half of the year, a
significant rise. The five largest projects account for 0.45
million m² of the new construction, of which nearly
3 000 000
2 500 000
2 000 000
1 500 000
1 000 000
500 000
0
0.3 million m² is found in two e-commerce BTS projects in
Gryfino (near Szczecin).
Although there is a large amount of new warehouse space due to
be delivered in H1 2017, the majority of it is already secured by
future owner-occupiers, which limits the potential negative impact
on the vacancy rate. As well as the two e-commerce projects
mentioned above, there are several smaller BTS spread across
Poland, e.g. Kaufland in Bydgoszcz (45,600 m²), Carrefour in
Bydgoszcz (38,000 m²), IFA Powertrain in Opole (34,000 m²) and
Mid Ocean in Ruda Śląska (24,900 m²).
Source: JLL, warehousefinder.pl Q4 2016
There is currently a quite unusual situation (probably for the first
time in the history of the Polish market): the highest volume of
construction activity is taking place in a non-core region, mainly
thanks to two very large transactions for the Szczecin region in
H2 2017.
Despite the considerable new pipeline, the overall share of
Chart 6: Industrial space delivered in 2016 by region (m2)
250 000
200 000
150 000
100 000
50 000
0
Source: JLL, warehousefinder.pl Q4 2016
Overall, modern industrial stock grew by 15% y-o-y, a higher than
average rate of growth due mainly to the emerging markets (the
speculative stock remains surprisingly low (25%, compared to
35% at the end of 2015). Also, rents remain at a relatively low
level and are certainly still attractive for new tenants.
Chart 8: Warehouse space under construction by region as
at Q4 2016 (m2)
8 Poland’s Industrial Market Report in 2016
350 000
300 000
250 000
200 000
150 000
100 000
50 000
0
The largest projects completed in 2016 were mainly delivered by
Panattoni, which focused predominately on the Warsaw Suburbs
and Upper Silesia, where relevant demand from logistics
operators and retail sector is to be found.
Speculative
Pre-let
Source: JLL, warehousefinder.pl Q4 2016
Largest completions in 2016
Panattoni is still the leading developer in Poland. Its large
Park
construction portfolio, which is spread across Poland, is well
secured and has a low share of speculative space (25%). At the
Panattoni Park
end of 2016 only a few smaller projects were being built on a
purely speculative basis.
Panattoni Park
Stryków II
Warszawa-Konotopa
Area (m2)
Location
Developer
85,200
Central Poland
Panattoni
46,700
Warsaw
Suburbs
Panattoni
41,400
Upper Silesia
Panattoni
41,400
Upper Silesia
Panattoni
41,000
Warsaw
Suburbs
Panattoni
Panattoni Park
Chart 9: Warehouse space under construction by
developer in Q4 2016 (m2)
800 000
Sosnowiec III
Panattoni Park
Sosnowiec II
600 000
400 000
Panattoni Park
200 000
Grodzisk
0
Speculative
Largest projects under construction in Q4 2016
Pre-let
Park
Source: JLL, warehousefinder.pl Q4 2016
Area (m2)
Location
Developer
161,000
Szczecin
Panattoni
130,000
Szczecin
Goodman
66,100
Warsaw
Suburbs
Panattoni
47,500
Warsaw
Suburbs
P3
47,300
Poznań
Panattoni
Panattoni BTS
Chart 10: Gross take-up by landlord in 2016
1 200 000
1 000 000
800 000
600 000
400 000
200 000
0
(m2)
Szczecin Amazon
Goodman BTS
Szczecin Zalando
Panattoni Park
Grodzisk III
P3 Błonie
Panattoni Park
Net take-up
Renewals
Source: JLL, warehousefinder.pl Q4 2016
Poznań VIII
Source of both tables: JLL, warehousefinder.pl, Q4 2016
Poland’s Industrial Market Report in 2016 9
Rents
Downward pressure on rents is coming to a halt, with only
Warsaw Inner City and Wrocław registering minor
decreases. What lies ahead: stability or increases in rents?
Over the last five years the major Polish industrial regions have
displayed little or no change with regard to headline and effective
Chart 11: Headline rents in regions (€ / m2 / month)
5,5
5,0
4,5
4,0
3,5
3,0
2,5
2,0
rents. Slight downward movements were observed in some major
markets, but involved only small adjustments of €0.2 / m² /
month. In the emerging markets (such as the Tri–City, Kraków
and Warsaw Inner City) falls in rents occurred more rarely, but
Big Box
SBU
were usually more pronounced and ranged from €0.2 to 0.5 / m² /
month.
Over the last few years Poland has been the most competitive
industrial market in Europe in terms of leasing costs. In
conjunction with its gradually improving road infrastructure, that
position has further strengthened, which over the last year has
been particularly noticeable in the western part of Poland (in
locations such as Poznań, Wrocław and Szczecin).
While headline rents were relative stable, in some regions the
dynamics of the lower bands of effective rents were a good
indicator of increased competition there, e.g. Upper Silesia,
Wrocław, Poznań and Central Poland. In majority of markets the
gap between the lower band of effective rents and upper
headlines is approximately €1.5 to 2.0 / m² / month.
During 2016, headline rents remained stable in the Warsaw
Suburbs (€2.7–3.6 / m2 / month), Upper Silesia (€2.7–3.5 / m2 /
month), Poznań (€2.8–3.5 / m2 / month), Central Poland (€2.6–
3.2 / m2 / month) and the Tri-City (€3.0–3.3 / m² / month). Small
falls of €0.1 to 0.2 / m² / month were recorded in Warsaw Inner
City and Wrocław. Other components of total rental expenses
(such as those for attached offices and service charges) have
remained quite stable over the last few years.
Source: JLL, warehousefinder.pl Q4 2016
Headline rents are usually the basis for further specific
negotiations, during which developers often propose a range of
incentives, such as rent-free periods and partial or full fit-out
contributions. The size of rent reductions depends largely on the
lease length, covenant strength and the current market situation.
Over the last year some minor downwards changes, of €0.1 to
0.2/ m2/ month, in effective rents were observed in Poznań,
Warsaw Inner City and Wrocław. As at the end of 2016 the most
competitive regions with regards to effective rents were Upper
Silesia (€1.9–3.1/ m2/ month), the Warsaw Suburbs (€2.0–2.8 /
m2 /month), Central Poland (€2.0–2.8/ m2/ month) and Poznań
(€2.1–3.0/ m2/ month).
Chart 12: Average headline rents in regions
(€ / m2 / month)
3,6
3,3
3,1
2,8
2009
2010
2011
2012
2013
Poznań
Upper Silesia
Central Poland
Warsaw Suburbs
Source: JLL, warehousefinder.pl Q4 2016
2014
2015
Wrocław
2016
10 Poland’s Industrial Market Report in 2016
Industrial Land
Strong demand for new locations in the eastern part of Łódź,
south-western Warsaw and along the S3 express way.
Stability of land prices in major locations.
In 2016 developers’ attention with regards to securing new
locations for industrial projects was focused mainly on regions
and cities which have benefitted (or will soon benefit) significantly
from the completion of new infrastructure projects.
Prices
Overall, no major changes in the prices of industrial land in
Poland were recorded over the last year.
The completion of the A1 motorway between Stryków and
The completion of the A1 motorway (Stryków to Tuszyn) boosted
demand for land in the eastern part of Łódź. The gradual
extension of the S8 expressway in the south-western suburbs of
Warsaw resulted in a strong construction pipeline of new
projects, as well as increased demand for investment land. Other
interesting locations are spread along the gradually extended S3
expressway, which runs from Szczecin towards the border with
the Czech Republic, creating investment opportunities in new or
emerging submarkets such as Zielona Góra, Nowa Sól and
Tuszyn in the middle of 2016 and the strong development of the
special economic zone in Łódź positively affected land prices in
the eastern part of that city, raising land prices in Łódź by 20 PLN
/ m², to 180 PLN / m².
A slight fall was observed in Upper Silesia, where the lower price
band decreased from 90 PLN / m² to 80 PLN / m².
Region
Price (PLN / m2)
Świebodzin.
Warsaw Inner City
350 – 550
An increasingly important factor for new projects and demand for
industrial land is workforce availability. The labour markets of
Warsaw Suburbs
50 – 300
some agglomerations, such as Poznań and Wrocław, are already
well-drained and reaching the limit of labour-intensive new
Central Poland
65 – 180
investments; therefore some smaller locations are beginning to
draw the attention of investors.
Poznań
140 – 200
Overall, regions located in western Poland (Poznań, Wrocław
Wrocław
120 – 220
Upper Silesia
80 – 200
Kraków
80 – 300
Tri-City
120 – 240
and Szczecin) seem to be more attractive compared to eastern
Poland, despite the higher costs there, which can be put down to
better accessibility and proximity to western markets.
Poland’s Industrial Market Report in 2016 11
Investment Market
Industrial investment was at an all-time record high in 2016,
with the P3 platform sale making a significant contribution.
Prime products are continuously on investors’ radar.
Over the last five years the warehouse investment market has almost
was positive and investors’ appetite for core product located in key
tripled in terms of total value of traded assets compared to the
logistics hubs in Poland remained at high level. Nevertheless, the
investment volumes reported between 2004 and 2011. As a result of
universe of active investors in this sector started to become relatively
increasing liquidity over the last 48 months, the warehouse investment
thin, particularly during the latter part of 2016. For standardized logistics
market has become a very recognizable and desirable sector in Poland.
product this situation is expected to continue throughout 2017, while
core assets on long leases shall attract strong investors’ demand.
In 2016 the warehouse investment market saw €769 million in
transactions, from 14 deals, of which six were portfolio sales and one
was a platform disposition. These seven transactions accounted for
Ownership continues to be highly concentrated, with the top five players
almost 82% of the total 2016 industrial investment volume. The
(Prologis & JV Partners, SEGRO & JV Partners, Panattoni & JV
remaining transactions involved small and medium-size parks located in
Partners, Logicor and Goodman) together controlling 56% of stock in
key industrial hubs. Balancing transactions comprised small and medium
Poland at the end of 2016.
size parks located in key industrial hubs.
Chart 13: Industrial Investment Volume (€ millions) & Prime
industrial yield (%)
1 000
10%
800
8%
600
6%
400
4%
200
2%
0
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Industrial Investment
The largest deals concluded in 2016 included:
•
GIC’s acquisition of P3’s European industrial platform with the
Polish element amounting to approximately €285 million;
•
CBREGI’s purchase of a portfolio from Hillwood for approximately
€155 million;
•
21%
22%
3%
3%
3%
4%
4%
5%
10%
9%
8%
8%
Prologis & JV Partners
SEGRO & JV Partners
Panattoni & JV Partners
Logicor
Goodman
P3
Hines
PZU
CLIP
CBRE Global Investors
MLP
Remaining landlords
Source: JLL, warehousefinder.pl Q4 2016
Prime industrial yield
Source: JLL, warehousefinder.pl Q4 2016
•
Chart 14: Ownership structure
Hines REIT’s purchase of a portfolio from NBGI for approximately
€81 million;
GLL’s acquisition of the Amazon Fulfilment Centre in Poznań of over €70
million.
It should be also noted, that outside a handful of transactions (including
P3 portfolio) almost none of the key deals concluded in 2016 was
initiated and closed during the year. In our opinion it proves limited
liquidity in the market coupled with investors focusing on either
absolutely core and prime assets or value-add opportunities.
Over the last 12 months we have witnessed reaffirmation of the prime
warehouse yields at sub 6.75% with the best-located, exceptional, long
leased assets trading significantly below 6.00%. Properties lacking one
of those elements were, and are, trading at discounts of up to 200-250
basis points to prime pricing.
A pipeline of industrial transactions for 2017 looks quite promising.
The largest purchasers were: GIC, CBREGI and Hines REIT, each of
which signed deals for in excess of €100 million0. Also GLL, with its
purchase of Amazon Fulfilment Centre in Poznań and Exeter made their
footprint on Polish warehouse investment market. The biggest sellers
were TPG/P3, Hillwood, NBGI, Amazon, ECI and Waimea Holding.
The above, coupled with a strong leasing market at the bottom of the
rental cycle proves that the investment sentiment on industrial sector
Volumes could potentially exceed those of 2016 with large
portfolio/platform transactions available for trade. With a strong leasing,
solid activity of developers and prospects of stabilising rents we remain
positive about further evolution of the investment market and
stabilisation of yields for prime warehouse product.
12 Poland’s Industrial Market Report in 2016
Regional Analysis
Development activity is gradually expanding beyond the
core regions.
At the end of 2016 Poland’s total industrial warehouse and
production stock for lease stood at 11.2 million m² (9.8 million m2
New small and medium-size projects are emerging along the S3
expressway (that runs from Szczecin to the border with the
at the end of 2015) with the share of the major five regions
seeing a fall from approximately 90% to 88% over the last year.
Czech Republic), which is becoming an increasingly desirable
location for e-commerce occupiers (servicing mainly operations
in Western European countries) and light manufacturing.
With regards to tenant activity in emerging markets, the share of
those markets increased from 19% of the national total to 23%,
mainly due to the two large e-commerce deals in Szczecin (in
Regions in the eastern part of Poland (Lublin and Podkarpacie)
showed little activity on the demand and supply sides, despite
Northern Poland) region, which accounted for almost 11% of total
demand (14% of net take-up) in 2016.
gradually improving infrastructure there.
Map of the major industrial regions
Poland’s Industrial Market Report in 2016 13
Warsaw
Infrastructure improvements have quickly
translated into very strong development activity,
although it is still focused on the south-western
suburbs of the Warsaw agglomeration.
Despite its growing investment opportunities and improving
infrastructure, the development of the warehouse and industrial
sector in Warsaw region has traditionally concentrated on the southwestern areas of the agglomeration. Over the last few years,
Interestingly, the vacancy rate in the Warsaw Suburbs was only
5.5% at the end of the year, which is the second best result in the
history of the region (it was lower only in Q3 2007, when it was
4.8%).
developers and landlords have been struggling with a relatively high
vacancy rate and pressure for reductions in rents; therefore, in order
The region has plenty of areas which are yet to appear on
to mitigate potential risks, they continue to focus on the most sought-
developers’ radars, for example the eastern and northern parts of
the agglomeration, which will most likely open up upon the full
after locations. For that reason there has been a shortage of new
investment in the Inner City and instead a focus on south-western
suburbs of Warsaw and its neighbouring locations.
completion of the Warsaw Ring Road. However, the southwestern suburbs will still remain the most favourable location for
logistics operators.
Due to its product specifics, demand for warehouse and industrial
space in Warsaw Inner City is characterized by a large number of
small deals. In 2016, if one excludes a single deal with ABC Data
(for 25,000 m²) the remaining transactions averaged only 1,471 m².
The Warsaw Suburbs, on the other hand, are typically chosen by
tenants looking for larger floor space, with average deal size of 6,062
m². These mainly involved companies from the logistics and retail
Headline rents for industrial space in the Warsaw Suburbs have
remained relatively stable since 2011, at €2.7–3.6 / m2 / month.
However, the costs of leasing space in Inner City locations is
gradually falling and as of the end of 2016 were €4.1–5.1 / m2 /
month. Effective rents were €2.0–2.8 / m2 / month in the Warsaw
Suburbs and €3.5–4.6 / m2 / month in the Inner City.
sectors, who chose parks in the vicinity of Grodzisk Mazowiecki
(Raben and H&M), Teresin (DSV Solutions and Schenker) and Janki
Inner City
Suburbs
Existing
stock (m2)
653,000
2,511,000
Gross demand in
2016 (m2)
72,000
745,000
Net demand in
2016 (m2)
32,000
460,000
Vacancy rate
9.4%
5.5%
Headline rent
(€ / m2 / month)
4.1–5.1
2.7–3.6
Effective rent
(€ / m2 / month)
3.5–4.6
2.0–2.8
ABC Data – 25,000 m2
Raben – 42,500 m2
(DSV Solutions).
2016 was yet another year with only very modest development
activity in Warsaw Inner City, which was limited to just one small
SBU project (Ideal Idea Park IV, 6,000 m²). However, the completion
of new roads in the south-western suburbs of Warsaw significantly
increased the attractiveness of those areas, particularly Janki,
Grodzisk, Raszyn, Ożarów and Pruszków. Developments in the
Warsaw Suburbs are mainly built for logistics operators: of the total
460,000 m² of net take-up, 215,000 m² was leased by that sector.
Main leasing
transactions
Distribution Park
Annopol
Panattoni Park
Grodzisk III
14 Poland’s Industrial Market Report in 2016
Upper Silesia
A very competitive region which is well
positioned for further moderate growth.
Upper Silesia, the second largest industrial market in Poland
remains very competitive, with strong potential for further growth.
brownfield sites), Upper Silesia has been able to remain one of
the most attractive locations in Poland in terms of price.
Due to its significant population and size, it offers an attractive
combination of advantages with regard to factors which are
Industrial land available in this region ranges from 80 to 200 PLN
currently becoming challenges in other regions: relatively cheap
and abundant land, and available labour force (a factor which is
/ m² (compared to 80 to 300 PLN / m² in the nearby Kraków and
120 to 200 PLN / m² in Wrocław).
becoming an important growth obstacle in Wrocław and Poznań).
Upper Silesia
New construction activity here (135,000 m², in six projects) at the
end of 2016 was mainly concentrated in Sosnowiec (57,000 m²),
Existing stock (m2)
Ruda Śląska (35,000 m²), Gliwice (33,000 m²) and Tychy
(11,500 m²). Moreover, the projects currently under construction
Gross demand in 2016 (m2)
491,000
Net demand in 2016 (m2)
340,000
are very well secured (88%).
1,955,000
The vacancy rate in Upper Silesia remained stable over the last
year, and stood at 7.2% in Q4 2016. The largest availability of
Vacancy rate
stock in existing schemes was found in Sosnowiec (36,000 m²),
Gliwice (36,000 m²) and Chorzów (21,000 m²).
Headline rent (€ / m2 / month)
2.8–3.5
Effective rent (€ / m2 / month)
1.9–3.1
Both headline and effective rents in Upper Silesia remained
stable in 2016. The headline rent band ranges between €2.8 and
€3.5 / m2 / month, while effective rents were €1.9–3.1 / m2 /
month. Overall, thanks to low land prices (e.g. post-industrial
Main leasing transactions
7.2%
Eurocash – 30,000 m2
Goodman Sosnowiec Logistics
Centre
Play Power - 27,400 m2
Panattoni Park Sosnowiec III
Poland’s Industrial Market Report in 2016 15
Poznań
Lower activity in this region despite the
favourable economic environment.
After a year which saw the completion of 177,400 m² (compared
to 244,000 m² in Upper Silesia), Poznań did not advance to the
Unfortunately, despite the favourable market environment there
was a sharp rise in the vacancy rate last year, from just 1.9% to
second position in Poland in terms of total stock.
7.2%. The majority of the available space is concentrated in
parks located in the city of Poznań (66,200m², three parks) and
As of end of 2016 new construction activity was at the level of
220,000 m ² and the vacancy rate in Poznań stood at 7.2.%
Gądki (39,500 m², four parks).
Poznań and Wrocław are the two major warehouse and industrial
markets in the western part of Poland and at the end of 2016
Rents in the Poznań region have been almost frozen since mid2014, with periodic minimal downwards adjustments of the lower
both displayed shortages in labour-force availability. In December
2016 the unemployment rate in Poznań was only 1.9%, heralding
band of the effective rent. Last year Poznań continued to be
competitive among the key regions in terms of warehouse rental
potential challenges with recruiting for new projects and potential
pressure for salary increases. Shortages of available labour
costs despite quite high land prices (140 to 200 PLN / m²).
Headline rents range are quoted at between €2.8 and €3.5 / m² /
could have been one of the factors behind Amazon and Zalando
choosing the Szczecin area as the location of their new fulfillment
month, while effective rents are €2.10–2.9 / m2 / month.
centres instead of Poznań.
Poznań
Similarly to the Wrocław region, the potential in Upper Silesia for
new warehouse and logistic investments lies within small and
Existing stock (m2)
mid-sized towns located along the S3 expressway – the new
transport corridor connecting Szczecin with the Czech Republic.
Gross demand in 2016 (m2)
429,000
This new transportation backbone of western Poland is steadily
gaining in attractiveness and after completion it is well positioned
Net demand in 2016 (m2)
274,000
to become a noteworthy alternative for Czech companies looking
for access to a seaport.
Leasing transactions in Poznań in 2016 were on average
Vacancy rate
7.2%
Headline rent (€ / m2 / month)
2.8–3.5
Effective rent (€ / m2 / month)
2.1–2.9
relatively large (8,932 m² compared to 6,902 m² nationwide),
driven by a few BTS projects for the automotive and retail
sectors. The share of the traditionally most active sector, logistics
operators, was 29%; over the last five years it was 25%.
1,806,000
Polomarket – 39,600 m2
Goodman BTS Polomarket
Main leasing transactions
Trio Line – 32,300 m2
Panattoni Park Poznań V
16 Poland’s Industrial Market Report in 2016
Central Poland
Despite strong demand, developers are hesitant
with regard to new projects. There is limited
availablity of space in some locations.
In 2016, the already well accessible and centrally located Łódź
received a long-awaited bypass road: the completion of the
manufacturing (25,000 m²). Three companies from the paper and
books sector leased nearly 50,000 m² (of which 19,800 m² came
remaining part of the A1 motorway between Stryków and Tuszyn
in July streamlined the vast majority of transit traffic to the outside
from new leases).
of the city of Łódź. This new road also increased the
attractiveness of land in the eastern suburbs of Łódź and
Development activity in the region was spread over four
subzones, with six projects delivering a total of 199,000 m². The
shortened the travel time between the Stryków and Piotrków
Trybunalski sub-regions. A slight increase in prices of industrial
two largest investments in Stryków provided 119,000 m² and
were very quickly leased: only 7,500 m² was available as at the
land located in the eastern part of Łódź (up by 20 PLN to 180
PLN /m²) was recorded.
end of 2016.
Infrastructure improvements, as well the presence of the special
Despite significant activity by players on both the demand and
supply sides, rents in Łódź and the two other subzones of Central
economic zone, boosted additional investments Łódź. The city’s
central location by the junction of two major motorways (the A1
Poland (i.e. Stryków and Piotrków Trybunalski) were stable over
the last year. Łódź offers more attractive rents for SBUs than
and the A2), as well as the S8 expressway linking Warsaw (and,
within the next year, Białystok) and Wrocław, makes distribution
Warsaw or Wrocław: headline rents are quoted from €3.4 to €4.3
/ m2 / month, while effective rents are in the range of €2.7 to €3.7
on a nationwide scale possible. The construction of the S14
expressway (Łódź’s western ring-road) is scheduled to start next
/ m2 / month. Big-box units are significantly more affordable, with
headlines from €2.6 to €3.2 / m2 / month and effective rents
year, with completion planned for 2020.
between €2.0 and €2.8 / m2 / month. Central Poland therefore
remains the most price competitive region in the country.
As of Q4 2016, there was no modern industrial space available
for rent in Łódź; two years ago vacancy rate there was 9.0%. To
Łódź
Region
Existing stock
(m2)
409,000
1,156,000
Gross demand in
2016 (m2)
64,000
219,000
Net demand in
2016 (m2)
25,000
188,000
After a year of very strong tenant activity in 2015, when 318,000
Vacancy rate
0%
4.1%
m² of space was leased as a result of new deals and expansions,
2016 showed moderate new demand, only 213,000 m², driven,
Headline rent (€/
m2/ month)
3.4–4.3
2.6–3.2
Effective rent (€/
m2/ month)
2.7–3.7
2.0–2.8
Recticel – 19,500 m2
Agata Meble – 42,900 m2
Logicor Łódź
Prologis Park Piotrków II
meet the rapidly growing demand, two projects are now under
construction, offering 51,500 m² (89% secured). The remaining
pipeline, of 76,800 m² in three projects, is already 89% pre-let. In
the Piotrków Trybunalski area, which saw a significant fall in
vacancy from 34% to just 4.3% over the last three years, only
one project is now under construction (a BTS for Agata Meble).
as usual, mainly by logistics operators (a 29% share of net takeup) and retailers (25%).
Unlike in 2015, last year lacked large deals signed by retailers
looking for a main hub in Central Poland. Except for Agata Meble
(42,900 m²), the year’s deals were relatively smaller and involved
mostly logistics operators (61,000 m² of new leases) and light
Main leasing
transactions
17 Poland’s Industrial Market Report in 2016
Wrocław
Shortages of labour in Wrocław and the
expected completion of the S3 expressway may
shift new industrial projects in this region to
new locations.
During 2016 vacancy rates fluctuated between 3.8% (Q2) and
6.3% (Q1), standing at 5.1% at the end of the year. The majority
With 1.4 million m² of modern stock, Wrocław is still the fifth
largest market in Poland. In 2016 an additional 104,000 m² was
of the available space is in several recently developed projects
by Panattoni (Panattoni Park Wrocław II and its further stages III
delivered in five projects (of which four by Panattoni).
IV and V) and two Prologis Park Wrocław projects.
The potential rapid growth of the region might be gradually
restricted by the limited availability of labour in the region, as the
In terms of headline rents, the Wrocław region has been quite
stable over the last five years, although strong pressure on the
unemployment rate in the city was just 2.8% in December 2016.
The labour market looks more favourable outside of Wrocław,
effective rents in big-box schemes was seen. Headline rents for
big-box units now range between €2.8 and €3.6 / m2 / month.
with the unemployment rate for the entire province at 7.3%.
Effective rents fell from €2.5–3.1 / m2 / month at the beginning of
2015 to €2.2–2.8 / m2 / month at the end of 2016. Rents in the
That, coupled with the anticipated completion of the S3
expressway (from Szczecin towards the border with the Czech
SBU segment were stable during the last year, with headline
rents ranging between €3.5 and €4.0 / m2 / month and effective
Republic) suggests that the growing demand from the ecommerce and light industry sectors will most likely be met in
rents from €3.3 to €3.8 / m2 / month.
new locations, which are emerging along this road corridor. In the
Wrocław region those include locations near Legnica, where a
Wrocław
special economic zone is located.
Existing stock (m2)
The current construction pipeline of 102,000 m² is still mainly
located in the outskirts of Wrocław, but is now more diversified
Gross demand in 2016 (m2)
301,000
Net demand in 2016 (m2)
168,000
1,394,000
among four developers (Panattoni, Hillwood, MLP and Prologis),
with a higher percentage of speculative space (63%).
Vacancy rate
Gross demand of 301,000 m² featured strong shares of logistics
Headline rent (€ / m2 / month)
2.8–3.6
operators (41%) and light manufacturing (19%), which is not
surprising, given that Lower Silesia is becoming a popular target
Effective rent (€ / m2 / month)
2.2–2.8
for new investments. A significant number of new leases were
signed with Prologis (179,000 m²), which has approximately 0.5
million m² of warehouse stock in the region.
Main leasing transactions
5.1%
Deichmann Logistik –
13,300 m2
Prologis Park Wrocław III
Yusen – 12,900 m2
Prologis Park Wrocław IV
18 Poland’s Industrial Market Report in 2016
Northern Poland
Szczecin was targeted by two e-commerce
giants. Demand in the Tri-City comes mainly
from logistics operators
Szczecin, which already benefits from an excellent road
connection with Germany, will further leverage its strengths with
retailers, electronics and light manufacturing, which are very
much present in Poland’s other regions, generating strong
the upcoming completion of the S3 towards southern Poland.
Additionally, a new expressway (the S6) towards Koszalin is
demand for warehouse and industrial space.
already under construction. Despite the very popular A1
motorway and the successful performance of the Deepwater
The vacancy rate in Szczecin fell slightly, from 5.8% at the end of
2015 to 3.0% at the end of 2016, when only 5,600 m² was
Container terminal (DCT), as well as the ongoing construction of
the S7, the development of the Tri-City region was somewhat
available in Panattoni Park Szczecin. However, the Tri-City is
struggling with a high vacancy rate, which rose from 12.3% at the
sluggish in 2016.
end of 2015 to 14.1%. That might be due to the significant share
of speculative developments (61% at the end of 2015, 95% in
After the initial leading role of the Tri-City in Northern Poland, the
first signs of the growing importance of Szczecin were seen in
mid-2016 and 76% at the end of 2016) coupled with moderate
new demand.
2015. Despite being smaller population-wise and less affluent,
the development of the Szczecin region accelerated and in H2
For the second year in a row headline rents in the Tri-City and
2016 it outperformed the Tri-City in terms of demand and
construction activity.
Szczecin remained stable, at €3.0–3.3 / m2 / month and €3.0–
3.75 / m2 / month respectively. Effective rents are €2.5–2.9 / m2 /
The arrival of two large e-commerce giants (Amazon from the US
month in the Tri-City and €2.6–3.4 / m2 / month in Szczecin, also
unchanged over the last two years.
and Zalando from Germany) in H2 2016 put the Szczecin region
among the most sought-after locations in Poland (in terms of
Tri-City
Szczecin
Existing stock
(m2)
393,000
187,000
Gross demand
in 2016 (m2)
93,000
330,000
Net demand in
2016 (m2)
88,000
317,000
the first one is the gradual development and extension of
Panattoni Park Szczecin (expanded by 10,400 m² in Q1, 17,000
Vacancy rate
14.1%
3.0%
m² in Q3 and 11,400 m² in Q4) and the start in H1 of two mega
projects in Szczecin by Panattoni and Goodman. In addition to
Headline rent
(€ / m2 / month)
3.0–3.3
3.0–3.75
those projects, Waimea delivered 5,000 m² as an extension to its
North – West Logistic Park (reaching a total of 67,100 m²). In Q4
Effective rent
(€ / m2 / month)
2.5–2.9
2.6–3.4
volume, not the number of carried-out projects). Those two
developments are predominantly focused on servicing Western
European markets but show the potential of Szczecin as an ideal
location for servicing Germany and Scandinavian countries.
Development activity in Szczecin can be divided into two parts:
2014, Prologis started to build 9,200 m² in Prologis Park
Szczecin.
Demand in the Tri-City in 2016 was dominated by logistics
operators (which accounted for 65% of demand). However, the
average new deal size (2,928 m² net) was less than half the size
of the average deal that such companies signed on the national
level. The region lacks demand from other sectors, such as
Main leasing
transactions
Auto-Partner
Amazon
7,600 m2
161,000 m2
7R Logistic Gdańsk
Amazon BTS
19 Poland’s Industrial Market Report in 2016
Kraków
Kraków remains in the shadow of the rapidly
developing Upper Silesia. Market activity
remains very modest.
Ongoing infrastructure projects in the Kraków region are still quite
modest and mainly remain at the planning or tendering stage.
Vacancy rates sharply increased in H2 2016, from only 0.8% at
the end of 2015 to 9.0%. Available space appeared in existing
Only a small section of the S7 ring-road in the eastern part of
Kraków is currently under construction. The city still does not
assets and in one extension of a Goodman project. Excluding
one project securely leased by Goodyear in Tarnów, the vacancy
have a complete northern bypass or a convenient road towards
northern Poland (in the direction of Warsaw). Recently new
rate for Kraków and its suburban areas is at the level of 11.4%.
announcements were made with regard to the tender for the S7
express road from Nowa Huta towards the border with the
Kraków has been Poland’s second most expensive location since
Świętokrzyskie voivodeship. That road will be delivered in a
‘design and build’ formula, with the start of construction
scheduled for 2019 and completion planned in 2022. The
northern part of the ring-road is also in the planning stage, with
2009, with rents far above those seen in other agglomerations.
Headline rents for Kraków’s warehouse space now range
between €3.8 and €4.5 / m2 / month. Effectively those rents are
between €2.8 and 3.40 / m2 / month.
completion being scheduled for 2022.
Over the last year the industrial and warehouse stock in the
Kraków area increased by 59,500 m² (Upper Silesia had 244,000
m²) and the current pipeline is only 27,500 m² (Upper Silesia has
135,000 m²) in two 100% pre-let projects (extensions of 7R
Logistic Park Kraków). The major market players, which are
already present in the region, still have not started their projects
Kraków
Existing stock (m2)
268,000
Gross demand in 2016 (m2)
100,000
Net demand in 2016 (m2)
95,000
here and are currently focused on the market of Upper Silesia.
Vacancy rate
The Kraków region does not seem to be able to effectively
compete with the neighbouring Upper Silesia in terms of
9.0%
Headline rent (€ / m2 / month)
3.8–4.5
attractiveness for logistics. That is largely due to the shortage of
sufficient investment land, which results in high prices therefor.
Effective rent (€ / m2 / month)
2.8–3.4
Tenant activity in Kraków in 2016 was 100,000 m², which is
Main leasing transactions
comparable to that in the Tri-City. The limited share of logistics
operators, which lease mainly small units (an average of 2,600
m²), and the lack of retailers are the currently features of this
region. Therefore, demand comes mainly from construction,
automotive, light manufacturing and the remaining sectors. Weak
demand translates into limited supply and low construction
activity.
Valeo – 27,500 m2
Goodman BTS Valeo
Skawina
Lynka – 9,000 m²
Panattoni Park Kraków IV
20 Poland’s Industrial Market Report in 2016
Emerging Markets
Despite gradual improvements in
infrastructure, market activity in Eastern
Poland remains modest.
Over the last three years both the Lublin and Podkarpacie
regions were perceived as two prospective emerging locations on
the logistics map of Poland. However, despite gradual road
improvements and new investments in special economic zones,
both regions are facing a slowdown and their advancing to a
more mature stage of market development is still yet to be seen.
In the meantime, other comparable emerging regions, e.g.
Szczecin and Kujawy (which includes Toruń and Bydgoszcz) are
advancing quickly and seeing some large deals.
So far, the delivered supply seems to be sufficient to service the
local markets instead of having a wider (e.g. cross-border) scale
or operations.
The current pipeline of new projects is very modest, as only
6,400 m² is under construction in Lublin (MLP Lublin) and 4,700
m² in Rzeszów (Waimea Cargo Terminal Rzeszów-Jasionka).
Both regions are certainly lacking mid-size and larger deals
which could stimulated the incremental growth of supply. The
already transacted volumes were attributable mainly to local
companies operating on the domestic market.
Kujawy, which includes areas around Toruń and Bydgoszcz, with
129,000 m² of new stock under construction in four projects, will
quickly have a comparable level of stock to the Tri-City and
Kraków. New developments are also well secured, at 81%. At of
the end of 2016, Toruń (with 96,000 m²) had outperformed
Bydgoszcz (64,000 m²), but within the next few months that
situation will be opposite as 129,000 m² of pipeline in Kujawy is
being developed in Bydgoszcz. On the demand side Bydgoszcz
also outperforms Toruń.
Gross take-up in Lublin in 2016 was only 19,500 m² and limited
to only five deals, of which four were signed in Panattoni Park
Lublin by two companies from the food sector and two logistics
operators. Year on year the already low demand fell by 25%. A
similar situation with regard to tenant activity was seen in
Podkarpacie, as only six lease transactions in two parks were
signed in the entire year, both in H1. Kujawy, with 127,000 m² of
take-up in 2016, outperformed both Lublin and Podkarpacie.
Other emerging markets of similar or comparable size performed
much better in terms of demand; however, in some cases overall
results were driven by only one or two deals, e.g. Szczecin and
Kujawy.
Headline rents for warehouse facilities in Lublin remained stable
during 2016 and now range between €3.2 and €3.5 / m2 / month.
Effectively these rents are between €2.6 and 3.20 / m2 / month.
Rzeszów has slightly higher headline rents (€3.4 to €4.0 / m2 /
month) but offers comparable effective prices (€2.6 to €3.1 / m2 /
month). The Kujawy region seems to be the most competitive
region among the emerging markets in terms of rental levels as
effective rents there range from €2.5 to 2.7 € / m² /month.
Existing stock
(m2)
Gross
demand in
2016 (m2)
Net demand
in 2016 (m2)
Vacancy rate
Headline rent
(€ / m2 /
month)
Effective rent
(€ / m2 /
month)
Podkarpacie*
Lublin
Kujawy
153,000
93,000
161,000
19,000
19,500
127,000
19,000
19,500
127,000
2.1%
9.6%
1.0%
3.4–4.0
3.2–3.5
3.2–3.5
2.6–3.1
2.6–3.2
2.5–2.7
Borg –
Main leasing
transactions
5,000m2
Panattoni Park
Rzeszów
*formerly labeled as Rzeszów
ABM –
6,400 m2
MLP Lublin
Kaufland –
45,000 m²
Panattoni Park
Bydgoszcz
21 Poland’s Industrial Market Report in 2016
Summary and Outlook for 2017
The market is at all-time highs and well positioned for
another record year.
The record activity by both tenants and developers in 2016 gives
reasons for cautious optimism for 2017, provided the overall
However, bearing in mind the downturn in demand seen in 2012,
with most lease transactions being signed for a five-year term, that
economic environment remains strong. However, as 2016 proved
(with the Brexit vote and the presidential elections in the US),
may result in the amount of renegotiated space in 2017 being lower
than that in 2016.
political and economic uncertainty have the ability to shape the
global economy in 2017. As a result, international trade and
One should note that the road construction programme will continue,
industrial and logistics markets may also be affected.
with new expressway sections scheduled for delivery in 2017.
Among others, the S3 expressway is expected to become a hot
Despite the significant new pipeline scheduled for delivery in H1
2017, the overall vacancy rate shouldn’t be negatively affected, as
topic and an important transport corridor in Poland. As delivery of
large portions of the S3 may be in 2017/18 excellent investment
at the end of 2016 75% was already secured by pre-lease
agreements. Major regions are again expected to attract the lion’s
opportunities will emerged along Poland’s western border.
share of the market activity.
Q4 2016
Warsaw
Upper
Poznań
Silesia
Total Stock (m²)
Central
Wrocław
Poland
Northern
Kraków
Poland
Poland
3,164,000
1,955,000
1,806,000
1,565,000
1,394,000
579,000
268,000
11,198,000
Total Stock (y-o-y change)
+9.1%
+14.9%
+13.7%
+20.5%
+9.8%
+28.9%
+30.1%
+14.4%
Net Take-up (m²) 2016
492,000
340,000
274,000
213,000
168,000
404,000
95,000
2,185,000
Net Take-up (y-o-y change)
+71.1%
+50.4%
+22.9%
–33.0%
+40.0%
+218.1%
+79.2%
+48.4%
6.3%
7.2%
7.2%
3.0%
5.1%
10.5%
9.0%
6.1%
-270bps
-20bps
+530bps
-160bps
+70bps
+30bps
+820bps
-10bps
Completions (m²) 2016
218,000
244,000
177,000
199,000
104,000
131,000
59,500
1,208,000
Completions (y-o-y change)
+100.1%
+74.3%
-36.1%
+321.3%
-3.7%
-3.8%
+20.8%
+22.4%
319,000
135,000
220,000
128,000
102,000
345,000
27,000
1,450,000
4.10–5.10 (*)
2.80–3.50
2.80–3.50
3.40–4.30 (*)
3.50–4.00(*)
3.00–3.30(**)
3.80–4.50
2.60–3.20
2.80–3.60
3.00–3.75(***)
0% (*)
0%
0%(**)
0%
–3.0%
0%
Vacancy Rate Q4 2016
Vacancy Rate
(y-o-y change)
Under Construction
Q4 2016 (m2)
Headline Rents
(EUR / m² / month)
Headline Rents
(y-o-y-change rental band)
2.70–3.60
–2.1% (*)
–1.6%
0%
(*) Inner-city rents or Small Business Units ;(**) rents Tri-city (***) rents Szczecin
Source: JLL, warehousefinder.pl Q4 2016
0%
0%
22 Poland’s Industrial Market Report in 2016
Transactions
The largest new lease deals in 2016
Quarter
Region
Q4
Szczecin
Q3
Szczecin
Park
Area (m2)
Tenant
161,000
Amazon
Panattoni BTS Amazon Szczecin
Goodman BTS Zalando
130,000
Zalando
Q1
Kujawy
Panattoni Park Bydgoszcz
45,000
Kaufland
Q2
Central Poland
Prologis Park Piotrków I
42,900
Agata Meble
Q2
Warsaw Suburbs
Panattoni Park Grodzisk III
42,500
Raben
Q2
Kujawy
Panattoni BTS Bydgoszcz II
38,200
Carrefour
Q3
Q3
Q2
Warsaw Suburbs
Panattoni Park Grodzisk III
Panattoni BTS IFA
Panattoni Park Poznań V
35,000
H&M
34,000
32,300
IFA Powertrain
Trio Line
Park
Area (m2)
Opole
Poznań
Source: JLL, warehousefinder.pl Q4 2016
The largest lease renewals in 2016
Quarter
Region
Q4
Poznań
Goodman BTS Polomarket
Q3
Warsaw Suburbs
Logicor Teresin
36,000
DSV Solutions
Q1
Warsaw Suburbs
Panattoni Park Garwolin
25,000
Avon
Q3
Warsaw Inner City
Distribution Park Annopol
25,000
ABC Data
Q4
Warsaw Suburbs
P3 Błonie
20,200
Europapier
Q2
Central Poland
Logicor Łódź
19,500
Recticel
Q1
Poznań
Logicor Poznań I
19,300
Arvato
39,600
Tenant
Polomarket
Q1
Warsaw Suburbs
Prologis Park Teresin
18,400
Schenker
Q1
Poznań
SEGRO Logistics Park Poznań Komorniki
17,000
Arjo Huntleigh
Q1
Upper Silesia
Prologis Park Chorzów
16,700
ArchiDoc
Q1
Poznań
SEGRO Logistics Park Poznań Komorniki
16,500
Źabka
Source: JLL, warehousefinder.pl Q4 2016
The largest investment transactions in 2016
Quarter
Location
Project
Area (m²)
Vendor
Purchaser
Q4
Mszczonów, Błonie, Piotrków Trybunalski, Poznań
P3 Platform / Portfolio
516,000
P3/TPG
GIC
Q4
Gdańsk, Bielsko-Biala, Ożarów, Wrocław
Hillwood Portfolio
220,500
Hillwood
CBREGI
Q2
Garwolin, Grodzisk Mazowiecki, Toruń, Mysłowice,
Legnica
NBGI Portfolio
127,000
NBGI
Hines REIT
Q1
Poznań
Amazon Fulfilment
Centre
123,500
Amazon
GLL
Source: JLL, Q4 2016
Poland’s Industrial Market Report in 2016 23
Market Practice for Leasing or Acquiring Industrial Space
Leasing Space
Lease length
Typically three to five years; seven to ten years more common for BTS projects.
Rental basis
Paid monthly in advance, with rents denominated in euro but paid in zloty.
Lease agreement collateral
Bank guarantee or cash deposit equivalent of three to six months’ rent and service charge, all increased by VAT.
Rent increases
Annually, according to the Harmonized Index of Consumer Prices (HICP).
Repairs
Internal: tenant. External/structural and common areas: landlord, although recovered through service charges. Common areas:
landlord, although recovered through service charge (with the exception of major repairs).
Insurance
Landlord covers costs of building insurance (recovered through service charges), tenant covers insurance of its own premises,
contents and civil liability.
Agency fees
15% to 25% of the annual rent, increased by VAT, depending on the lease length. Fees are paid by the landlord. Remuneration
may also be calculated as a percentage from monthly rent or percentage of the total value of a lease contact. In the case of
renegotiations led on behalf of a tenant, remuneration may be paid by the tenant depending on the percentage of the savings
secured for the tenant.
Service Charges
Range between €0.85 and €1.20 / m² / month.
Reinstatement
Negotiable lease by lease.
Other developer incentives
Rental Cost
•
•
Partial or full fit-out (depending on the transactional volume and lease length).
Rent-free periods are a common practice on the market, usually in the range of one and a half to two months per
year of the lease. Rent-free periods depend on the transactional volume and lease length. However, in the case of
exceptionally large deals rent free periods can be even longer.
Largely depends on the fit-out requests, lease term and location. Effective rents range from €1.9 to €3.4 / m2 / month.
Source: JLL
Purchasing Space
VAT
Asset sale: 23% VAT on buildings and land (commercial properties) or, in exceptional cases (if a transaction classified as the
sale of an enterprise), civil-transaction tax in the amount of 2% of the transaction price.
Sale of shares: 1% of the NAV (net asset value).
Court registration fees
Real estate transactions are subject to fixed court registration fees, not linked to the volume of the contract, e.g. PLN 200
(approximately €48) for the entering of the right of freehold or perpetual usufruct into the Perpetual Book.
Notarial fees
Vary according to transaction price, but no more than six months’ average salary in the domestic economy for the previous year.
Agency fees
Typically 1–3% of the purchase price, plus VAT at 23%.
Land prices
Largely depend on the location of the site: if the site is located in the vicinity of a city or within a city, €35 to €75 / m²; if the site is
located further away from a city, €10 to €20 / m².
Insurance
Landlord covers costs of building insurance (recovered through service charges), tenant covers insurance of its own premises,
contents and civil liability.
Agency fees for land
acquisition
Source: JLL
3% of the transaction price, plus VAT at 23%.
Tomasz Olszewski
Head of Industrial Agency
+48 22 167 02 20
[email protected]
Tomasz Mika
Head of Industrial Poland
+48 22 167 02 21
[email protected]
Tomasz Puch
Head of Office and Industrial
Capital Markets Poland
+48 22 167 00 25
[email protected]
Mateusz Polkowski
Head of Research
Research & Consultancy
+48 22 167 00 42
[email protected]
Przemysław Ciupek
Senior Research Analyst
Research & Consultancy
+48 22 167 19 29
[email protected]
Jan Jakub Zombirt
Associate Director
Strategic Consulting
+48 22 167 01 05
[email protected]
Industrial Market Report • February 2017
www.jll.pl
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