Sentiment improves in Polish industrial market: C&W

Sentiment in the Polish warehouse market improved in the second quarter of this year, with take-up increasing 30% to 174,800 m² compared to the previous quarter, Cushman & Wakefield reported.

After a slow start to the year, several major deals were closed in Q2, but tenants continued to exercise caution, the adviser said. Approximately 82% of the deals involved new leases and space extensions, with lease renewals accounting for only 8% of the total volume. Potential tenants were interested mainly in attractive top class schemes in Wroclaw, Warsaw and Upper Silesia.

Further reductions in new developments and the expected increase in real demand may, in the medium term, cause the supply of good-quality stock to shrink. The expected fall in vacancy rates should translate into rising rental rates for prime warehouse space in the medium term. At the same time secondary assets will likely see rental rates decline further due to lack of tenant demand.

While rental rates in prime locations rose slightly over the quarter, overall leasing costs remained steady. The total volume of vacant warehouse space in Poland amounted to approximately 1 million m² in Q2, or 16.5% of the total. The largest number of vacant buildings are located in Szczecin, Chorzów (Upper Silesia), Blonie, Sochaczew and Mszczonów (near Warsaw), Stryków and Piotrków Trybunalski (Central Poland), Wroclaw and its vicinities.