Industrial and logistics real estate market in CEE region - summary of the 1st half of 2022.
Very interesting report by CBRE that focuses on the economic and real estate markets in Central Eastern Europe after 1H2022. Below please find our summary on the Industrial & Logistics sector.
✅ 50 million sq m - the total stock of modern industrial and logistics space across the whole CEE region.
✅ 52% of the stock is located in Poland, 20% in Czechia, 12% in Romania, 9% in Hungary and 7% in Slovakia.
✅ 6 million sq m – space being under construction in CEE region (most is already pre-leased).
✅ 3.2% - is the average vacancy rate. The rate varies depening on the location from 0.5% in the Prague area, 2-3% in Poland, Slovakia and Romania, up to 6.4% in the Budapest area.
✅ EUR 5 / m / month - average headline prime rents in logistic parks.
Source: CBRE
Warehouse market - summary of the 1st half of 2022
What does the warehouse market look like after the 1st half of 2022? Below is a summary.
✅ 26.15 million sq m - total warehouse resources (+19% y/y). 2.42 million sq m was a new supply (+107% y/y) and 4.35 million sq m (+30% y/y) is under construction.
✅ The base rents ⤴️ and are in the case of big box warehouses € 3.40-4.80 sqm / month and in the case of SBU € 5-5.75 / sqm / month.
✅ 3.3% vacancy rate (-1.7% y/y). 867,000 sqm is available immediately (-32% y/y).
The long-term outlook for the market remains favourable because "in light of disrupted supply chains and high inflation, companies from various industries will strive to improve the efficiency of logistics processes, including their relocation and shortening of supply chains".
Source: Cushman & Wakefield Industrial.pl
Demand and supply on the warehouse market - forecast
In the coming years, the demand for warehouses will continue and the supply will slow down. CBRE informs about the current situation on the warehouse market.
✅ 26.1 million sqm - this is how many warehouses we have after the 1st half of 2022 (+20% y/y). In 2022, 2.2 million sq m have already been built and 4.4 million sq m are under construction. Thus, we will start 2023 with over 30 million sqm of warehouses.
✅ 3.2% is the vacancy rate and is the lowest in history.
✅ The demand for warehouses will be generated mainly by production 🏭 and automotive 🚘. E-commerce will also be a driver of demand, although not as strongly as in previous years.
Source: bankier.pl
Warehouse market in Poland - summary of the first half of 2022
CBRE summed up the first half of 2022 on the warehouse market in Poland.
✅ 26.1 million sqm - warehouse space in Poland (increase by 20% year on year)
✅ 4.4 million sqm - under construction (49% speculative)
✅ 3.2% - vacancy rate (record low)
✅ Base rent growth is growing (€4.6)
Source: CBRE
Stabilization of global supply chains
Tight global supply chains show signs of improvement. According to Financial Times the latest data show some signs of stabilization.
✅ According to Freightos, the average cost of transporting a standard container (40 feet) fell by 45% compared to last autumn.
✅ Since the beginning of the year the number of ships waiting to be unloaded in the port of Los Angeles has decreased by 75%, despite the fact that June was the most active month in over a century.
✅ According to Flexport air cargo deliveries time is constantly improving.
✅ The Global Supply Chain Pressure Index, run by the Federal Reserve Bank in New York and showing tensions in supply chains, fell by 57%.
Source: Financial Times
E-commerce extend the warehouse space
Currently, over 7 million sqm of warehouse space in Poland (30.7% of the total supply) is dedicated to e-commerce.
Comparing to 2019 this is 84% increase in space for e-commerce services.
According to Rzeczpospolita, "Logistics companies are still expanding their warehouses, the demand is still high. Companies are replenishing their stocks, and e-commerce is increasing their space".
Source: Rzeczpospolita
Further increase in demand for warehouse space
According to The Wall Street Journal, Prologis predicts that an increase in inventory could demand another 500 million square feet (46.6 sq m) of warehouse space.
According to CBRE the industrial real-estate market remains extremely tight with demand for e-commerce along with upheaval in supply chains. Vacancy rate for warehouses across the USA are down to 2.9% (vs 7.7% 10 years ago).
Source: The Wall Street Journal
