The dynamic development of the e-commerce sector, which has gained considerable importance during the pandemic, has had a strong impact on the warehouse real estate market. Currently, there is a race to find better locations for warehouses that would meet business needs.
The warehouse market in Poland and the shortening of the supply chain
The main cognitive challenges we face today are over-stimulation and working to tight deadlines. Despite the challenges of such a strained lifestyle, we are imbued with an instant gratification mentality because we expect them to be content consumers, service consumers, or buyers. For example, when purchasing online, we expect to ship or even deliver the order almost immediately after payment, similar to purchasing from a real-world store. The response to these consumer expectations is the dynamic development of dark-kitchens, dark-stores, i.e. the service and commercial branch responsible for delivering quickly immediately after placing an order in a dedicated application.
Growing consumer needs to have products “right away” have been exacerbated by the coronavirus pandemic. By narrowing the range of opportunities to spend free time and thus spend money, interest in e-commerce has increased. Fixed trading bans due to locally enforced restrictions also played a key role. Globally, however, there has been a shift in consumer habits as the aforementioned limitations have forced the majority of society to adapt to many solutions of current technology, including e-commerce.
The warehouse market in Poland – infrastructure development
The natural result of the development of e-com is the increased demand for logistics and warehouse space. In many cases, investors, tenants, developers and brokers compete to locate land near major city or planned national arterials, due to the continued lack of transportation accessibility caused by deficiencies in road infrastructure. At present, we can observe an increased development of the warehouse, logistics and production sector in Poland. For a variety of reasons, these sectors of economic activity are experiencing a business renaissance.
The increase in online sales and growing consumer demands for speedy delivery of orders have increased the need to store products close to points of sale. It has also been influenced by disruptions to supply chains caused by limitations in the operation of international transportation, caused primarily by restrictions introduced by governments of countries around the world. This has resulted in a great reorganization of some industry work and changes in the algorithms governing logistics.
Disruptions in the functioning of international supply chains and, consequently, the lack of transport supply and an increase in its prices have also forced many manufacturers to change the business assumptions which, in order to meet orders on the regional markets are increasingly looking for local production. Opportunities. Thanks to this, manufacturing companies can count on a distribution that is resistant to various types of restrictions and speculative increases in international logistics costs.
Warehouse market in Poland – high demand for urban warehouses
The increase in online sales has made it possible for small and medium-sized businesses operating in wholesale or retail, who are looking for smaller warehouse modules than those available in large halls. The response to this trend of funds and developers is the increasingly frequent construction of halls with a depth to separate a warehouse aisle in the form of a module of about 1,300 – 1,700 m2, or even 500 – 800 m2 of leasehold area, depending on the specificity of the region, in which the plot indicated in the urban plan is located. The resilience of the logistics sector to the negative effects of the COVID-19 pandemic on the economy has clearly changed the approach to small warehouses by capital partners of warehouse and production hall developers. In the context of Poland, small business type investments can be expected in the following regions, while the proximity to Warsaw remains the most attractive from a fund perspective.
Warehouse market in Poland – unmet demand
According to consulting firm JLL, the first quarter of 2021 brought net market demand of 1.1 million sq m, which included new leases, renegotiations and expansions. In this regard, it is the second best quarter in the history of the market. In turn, the share of vacant space in existing buildings amounted to around 6.5% at the end of the first quarter of 2021, fluctuating previously in 2020 between 7.3% at the end of the first quarter and 8.3% at the end of the third trimester. Based on the data, it can be assumed that the growing supply in the warehouse market still does not catch up with the growth rate of demand in this real estate segment.
The increasing digitization of all aspects of the human environment does not indicate a wavering in the upward trend in terms of demand for space in warehouses. Furthermore, the decisions of the countries of the Western European Union to limit logistics development further direct the demand for operating space, among others, towards Poland. The west-south regions of our country have for many years acted as a buffer for the supply chain from the Black Sea to Western Europe. Such a situation on the European market allows very optimistic forecasts for the development of the warehouse and production real estate market in Poland. The coming years can be expected to bring us new records for the number of square meters rented in this part of the commercial real estate sector.
Karol Frankowski, Rental Manager Hines Polska
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Financial Report 2021. Poradnik Gazety Prawnej 12/2021