Poland’s industrial and logistics market is stabilising following the sweeping changes of recent years and is expected to maintain its momentum, reveals At a Glance. Industrial and Logistics Market in Poland, Q3 2024, the latest quarterly report from BNP Paribas Real Estate Poland. Market fundamentals remained stable throughout the third quarter of 2024, with no significant changes in supply, demand or vacancy rates.
Economic factors impacting the sector’s growth
According to Statistics Poland (GUS), by the end of September 2024, Poland’s core inflation hit 4.9% year-on-year while retail sales dropped by 3%, affecting e-commerce, which, alongside logistics, is a key driver of warehouse demand.
“Industrial and logistics developers continue to exercise caution regarding speculative construction, prioritising projects with some space pre-let to tenants. At the end of September 2024, Poland’s total development pipeline stood at 1.94 million sqm, with more than half (53%) already pre-let,” says Martyna Kajka, Director, Industrial and Logistics, BNP Paribas Real Estate Poland.
The highest concentration of industrial and logistics development activity in the three months to September 2024 was in Lower Silesia (522,000 sqm), Warsaw II (308,000 sqm) and Upper Silesia (295,000 sqm).
Analysis shows that the Polish industrial and logistics market continues to display significant resilience to the challenges of the current global economic slowdown and shrinking new supply. Factors such as the stabilisation of vacancy rates, rising demand and Poland’s appeal as a logistics and manufacturing destination bode well for the continued positive growth of this sector.
Supply and vacancies
During the first three quarters of 2024, 2.1 million sqm of warehouse space came on stream, marking a 33% decrease year-on-year. The largest volumes of new space were delivered in Lower Silesia (373,000 sqm), Warsaw I & II (a total of 311,000 sqm) and Tricity (272,000 sqm). Meanwhile, the top regions for new industrial and logistics completions in the third quarter were Central Poland (142,000 sqm), Upper Silesia (104,000 sqm) and Warsaw II (72,000 sqm).
At the end of the third quarter of 2024, Poland’s overall vacancy rate stood at 8.0%, down by 0.3 pp over the quarter but up by 0.2 pp year-on-year. The highest vacancy rates were recorded in the West (21.2%), Warsaw I (11.2%) and Central Poland (11.2%), while the lowest were in Opole (2.5%), Szczecin (2.9%) and Kraków (4.0%).
Who leases warehouse space in Poland?
Regarding leasing activity, retail and e-commerce led the pack in the January-September period, accounting for 24% of all transactions, with 3PLs following closely at 23%. Among notable transactions of the third quarter of 2024 was the launch of Amazon’s new logistics centre in Gorzyczki, spanning 211,000 sqm, as an addition to its portfolio of 10 existing facilities in Poland. Newcomers to the Polish market include Notino, a European e-retailer of cosmetics and health products, which opened its first warehouse in Głuchów, near Łódź. Additionally, GLP is constructing a logistics facility in Stary Konik, a village close to the eastern border of Warsaw, near a junction of the A2 motorway - the largest building of its kind in Poland, featuring a wooden roof structure.
Lease renewals account for a large share of take-up
“The Polish industrial market has experienced significant changes since the outbreak of the war in Ukraine. Industrial and logistics rents, particularly for newly built facilities, have risen considerably due to escalating construction and project financing costs. In some cases, rental rates have nearly doubled, prompting companies to make more informed decisions about new locations. Consequently, lease renewals have recently significantly increased their share of total take-up, as tenants carefully evaluate the costs of relocating operations to new facilities. As a result, many opt to remain in older buildings offering lower rents,” explains Robert Pawłowski, Director, Industrial and Logistics, BNP Paribas Real Estate Poland.
A new market trend: re-commerce
Report authors also note the rise of re-commerce, whose rapid growth is likely to create a new role for warehouses. Re-commerce, or the practice of selling pre-owned items, is spreading to various sectors, such as fashion, electronics, furniture and sports equipment. According to the Offer-Up Recommerce Report, this market is projected to be worth USD 275 billion by 2028. Amazon is already generating annual revenues of over a billion euros from pre-owned sales.
The booming second-hand market will demand entirely new solutions, requiring spaces not only for storage but also for sorting products. The receiving area of a warehouse dedicated to re-commerce should include a quality check zone where items can be inspected, classified and labelled accordingly. Another essential component is a refurbishment zone where defects can be fixed and products cleaned.
