Poland’s warehouse market is set to maintain a strong momentum this year, driven by robust occupier interest with demand outstripping supply for many months and the economy powering ahead.
Tom Listowski, Partner, Head of Industrial and Warehouse, CEE, Cresa: “Poland is seeing not only an exponential growth in new warehouse and industrial space supply, but also quality improvements. New technologies are being deployed throughout all development stages: from design, construction and fit-out works through to optimisation of processes and a building’s operation. Warehouses are no longer just ordinary storage facilities on the outskirts of cities. They are high-tech schemes with automated or semi-automated racking systems and robots being increasingly used for product storage and picking. These changes will gather pace, particularly in areas where there are labour shortages. In advising tenants we keep track of developers’ plans and follow market trends and developments.”
Logistics trends are being spearheaded, among others, by Prologis, a leading warehouse provider. It uses BIM, an intelligent 3D model-based technology, to optimize architectural and building processes, and to improve energy efficiency of buildings.
“We have adopted a smart metering system for remote readings and control of utilities. We have also implemented Singu FM, a software platform for all-in-one property and facility management. We have developed a system to consolidate utilities acquisition and distribution optimisation for clients across the country and offer electricity prices below the market average, thus helping them benefit from the economies of scale of our portfolio,” adds Paweł Sapek, Senior Vice President, Country Manager of Prologis in Poland.
Demanding tenants = interesting projects
In 2018, developers delivered increasingly high-tech buildings onto the market. One of key completions was SEGRO’s manufacturing and warehouse project for Corning Optical Communications at SEGRO Logistics Park Stryków.
“The 39,200 sqm plant sets new standards for manufacturing buildings with welfare and office components. Three-level offices boast a glazed façade made of glass with anti-reflective coating to prevent overheating - an innovative solution at such schemes,” says Magdalena Szulc, Business Unit Director Central Europe at SEGRO.
Last year’s highlight was a tailor-made logistics centre developed for Żabka Poland at MLP Gliwice by MLP Group. The 24,700 sqm scheme comprises nearly 23,800 sqm of warehouse space, of which approximately 4,000 sqm is cold stores and freezers.
“The facility handles deliveries to a thousand stores in southern Poland per month. Its warehouse has 18,500 palette spaces and employs 315 staff,” says Agnieszka Góźdź, Director of Sales Department at MLP Group S.A.
In 2018, Panattoni Europe transacted nearly 1.5 million sqm of modern industrial space leases.
“In 2018 we delivered 1.2 million sqm to the market and entered the new year with more than a million square metres under construction on Poland’s core markets. We also continue to expand in emerging locations such as Białystok, Zielona Góra, Szczecin, Kielce and Lublin,” comments Marek Dobrzycki, Managing Director, Panattoni Europe.
Completion of the second project in Poland for an e-commerce giant Zalando was another success of Goodman last year. The e-retailer’s distribution facility measuring nearly 130,000 sqm was developed in Głuchów near Łódź.
“We are very pleased with this development, which is the second joint project of Goodman and Zalando on the Polish market,” says Jarosław Czechowicz, Head of Portfolio Management for Central and Eastern Europe.
Hillwood completed more than 364,000 sqm of warehouse and industrial space in 2018.
“We develop projects to meet specialized client requirements such as DPD’s 14,500 sqm warehouse facility with an extra number of docks in Pruszków for one of Europe’s biggest parcel sorting hubs. We also boldly venture into other new locations such as Krosno Odrzańskie (a 44,500 sqm scheme for Dirks) and Olsztynek (a 120,000 sqm facility for Zalando),” says Hubert Michalak, President of Hillwood Polska.
Plans, plans, plans
Developers have no intention of slowing down this year. Quite on the contrary, Prologis is planning to break ground on projects totalling more than 200,000 sqm.
“We continue to expand in core locations of the Polish logistics market, focusing on Central Poland, Poznań and Wrocław. In 2019, we intend to launch projects in our four parks: Prologis Park Poznań III, Prologis Park Łódź, Prologis Park Janki II and Prologis Park Wrocław V,” says Paweł Sapek.
Panattoni Europe is currently committed to 30 development projects across Poland, one of the biggest being Central European Logistics Hub in Łódź. The scheme will provide 400,000 sqm once fully built out and is presently seeing construction of a 58,000 sqm dishwasher factory for BSH Sprzęt Gospodarstwa Domowego.
MLP Group is planning to open MLP Stryków, its first industrial park in Central Poland.
“We have secured plots and reservation agreements to acquire new lands where new logistics parks will be developed. As a result, MLP Group’s current and potential real estate portfolio comprises a total of 16 operational logistics parks across Europe,” says Agnieszka Góźdź.
SEGRO also has ambitious plans for 2019 which feature, among other schemes, three projects to be delivered to the market this year: a 12,250 sqm manufacturing and warehouse facility at SEGRO Logistic Park Łódź, a 4,000 sqm building at SEGRO Industrial Park Wrocław and a 3,300 sqm extension at SEGRO Logistic Park Stryków.
Goodman will develop a logistics centre in Lędziny, a town in Silesia, which will provide up to 111,500 sqm of warehouse space, another warehouse at the Pomeranian Logistics Centre (25,000 sqm) and extend its projects in Krakow, Grodzisk and Poznań.
“We are also planning to complete the extension of our Wrocław IV Logistics Centre, up to 60,400 sqm, and begin construction of a new logistics centre in Janki near Warsaw,” comments Jarosław Czechowicz.
7R’s biggest projects in the pipeline include 7R Park Kielce (70,810 sqm), 7R Park Rzeszów (52,500 sqm), 7R Park Kraków VIII (41,485 sqm) and 7R Park Tczew (46,370 sqm).
Last mile warehouses
According to analysts and developers, in 2019 the warehouse and industrial market will continue to be driven mainly by e-commerce, which sets new trends in both storage technology and warehouse location. In addition to main fulfilment centres, online retailers also look for smaller warehouse units close to large city centres.
A new concept of urban warehouses branded City Logistics Park has been announced by Panattoni.
“It’s Panattoni’s latest offer in Europe for last mile logistics dedicated mainly to fulfilment of online orders. We’ve opened five schemes in Poland, including City Logistics Warsaw I and II, City Logistics Warsaw Airport, City Logistics Wrocław I and City Logistics Łódź I, which have already been 80% let. We’ve invested EUR 65 million in the new concept so far and we expect to increase our spending to EUR 1.2 billion, largely on the German, UK and Czech markets,” says Marek Dobrzycki.
MLP Group is also breaking ground on City Logistics type projects in Poland and Germany.
“They are small units offering modern warehouse space and high-quality fit-out offices, and typically measuring between 1,000 sqm and 2,000 sqm. Our warehouse rents are approximately EUR 3.00–3.50 per sqm. We are currently developing two projects in Poland: at MLP Poznań West and MLP Pruszków II. Each warehouse will provide a total of 10,000 sqm,” explains Agnieszka Góźdź.
7R has also established a new concept dedicated to firms needing smaller warehouses near city centres.
“About a dozen schemes will be added to the 7R City Flex Last Mile Logistics network. Thanks to their unique locations and easy access by trucks, they guarantee tenants quick distribution. It is our response to the challenges of last mile logistics faced by a growing number of operators,” says Maciej Krawiecki, Leasing Director at 7R SA.
2019 will be a good year
With the economy powering ahead, robust occupier demand and developers’ ambitious plans, the industrial and warehouse market is expected to maintain its growth momentum this year.
“We estimate that the Polish industrial and warehouse stock will top 20 million sqm in the next two or three years, largely fuelled by the expansion of e-commerce, which is a major driving force and the fastest-growing group of tenants on the logistics market,” says Paweł Sapek.