There are ‘no clouds on the horizon’ for the logistics and industrial sector in Central and Eastern Europe as demand is strong and will remain so, experts agreed at the PropertyEU CEE summit which was held in Warsaw recently.
‘There is an endless supply of money for logistics at the moment, European, American as well as Asian capital,’ said Ben Bannatyne, president of Prologis Europe. ‘In CEE we have a number of years ahead before any potential slowdown. We do not see any clouds on the horizon.’
Logistics is ‘the most attractive asset class going forward,’ said Robert Dobrzycki, CEO Europe, Panattoni Europe. ‘Demand will stay strong.’
Poland stands out because of its size, geographical position, competitiveness and educated labour force as well as its close ties with other countries, especially Germany.
‘The Polish market has never been better in terms of attractiveness,’ said Tomasz Kasperowicz, partner and director of industrial and logistics agency, Colliers International. ‘The market is doing extremely well, it has great potential and is attracting a lot of interest from investors. CEE does not have the volume or critical mass to be the driving force of European logistics yet, but we will get there eventually.’
Urban and last mile
Poland is a great location for megasheds and light manufacturing, but urban locations are also on the rise, delegates heard. E-commerce is growing at 15% a year and last-mile facilities are in demand in a very land-constrained environment.
‘Land is likely to become even more constrained in Poland in the future, which can lead to rental growth,’ said Bartek Mierzwiak, managing director, Central & Eastern Europe, Logicor. It is one of many reasons why Logicor will continue investing in the region, he said.
‘I believe Poland will continue to grow tremendously,’ said Bannatyne. ‘The advantages are its close proximity to Western Europe and the good infrastructure that has been built. Occupier demand is huge and it is a great market to be in.’
Lack of transparency
One downside, he added, is lack of transparency in the market: ‘Non-disclosure is a problem, as agreements with incentives are not being disclosed, and this applies to the office market as well as industrial and logistics. It is one of the reasons why we are not developing much in Poland, but we hope the market matures because we want to be back building as soon as possible.’ Their existing buildings, he said, are 95% occupied.
Innovation is crucial in the logistics sector and the winners will be those who can give occupiers the flexibility they need, the panellists agreed. ‘Two years ago there was no flexibility from developers, but today the situation is much better,’ said Daniel Franke, board member, Rohlig Suus Logistics. ‘Customers require technical specifications and automation and we must be open to deliver tailor-made solutions.’
Poland has already shown it can embrace innovation. Dobrzycki said that the 67,000m2 Amazon warehouse in Poznan that Panattoni has built, which uses robotics, is ‘the most efficient Amazon building in the world'.
