Resilience in the face of the pandemic

The warehouse and industrial market in Poland in Q1 2020 continues on a course of dynamic development in line with trends observed over recent years. This growth continues despite the Covid-19 pandemic which is significantly hindering the short-term expansion perspective of the majority of Poland’s economy. • At the end of March 2020 modern stock of warehouse and industrial space reached 19. million sq m, having increased by over 428,100 sq m in Q1 2020. • The five largest markets (Warsaw - 4.4 m sq m, Upper Silesia - 3,2 m sq m, Central Poland - 3.1 m sq m, Wrocław - 2.2 m sq m and Poznań - 2.1 m sq m) account for 80% of modern warehouse and industrial stock in Poland. • In Q1 2020 428,100 sq m of new space was added to the market, 15% down y-o-y. • Despite the current virus-driven crisis development activity yet again surpassed 2.0 million sq m reaching 2.2 m sq m. • Warsaw and Upper Silesia remained the most active markets with 624,600 sq m and 564,300 sq m under construction respectively. • Developers continue to show interest in the Tricity as space under construction there reached another historic high at 289,200 sq m, the third highest volume countrywide. • Covid-19’s turmoil does not seem to have a significant impact on demand for warehouse space, at least not in Q1 2020. Gross demand in the first three months of 2020 amounted to 1.1 million sq m, up by 5% y-o-y. • Net absorption during the first three months of 2020 reached 367,400 sq m, down by 12% y-o-y. • At the end of March 2020 Poland’s vacancy rate stood at 7.2% and remained stable q-o-q (0.1 pp. up) but was elevated in comparison with Q1 2019 (1.8 pp. up). • In Q1 2020 rents were stable in the majority of markets. Some decline in effective rents was observed in: Upper Silesia, Kraków and Rzeszów. • Headline rents range between EUR 2.70 per m sq per month and EUR 4.40 sq m/month for BIG BOX units and up to EUR 5.25 sq m/month for SBU. Effective rents range between EUR 2.00 sq m/month and EUR 3.30 sq m/month for BIG BOX unit and up to EUR 4.60 sq m/month for SBU.