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
ESG in European logistics market
"European Logistics and Supply Chain Sustainability Report 2022" is a very interesting research* on ESG in European logistics done by law firm HFW and warehouse developer Panattoni. Please find the executive summary below:
✅ 66% of third party logistics providers have won new business as a result of their ESG practices.
✅ 62% of companies are willing to pay extra for ESG certifications however exact amount depends on the size of the increase.
✅ 80% of companies have goals and targets in place to support environmental programmes and employee welfare aims with 75% having measures to address corporate governance.
✅ 45% of manufacturers and retailers believe that linking executive compensation to ESG targets would encourage improvements.
*research was conducted among logistics executives across 12 European countries.
Source: HFW and Panattoni
The dynamics of SBU & Last Mile market
It is highly recommended to get familiar with Colliers report "SBU & Last Mile Logistics Sector in CEE-15". Our summary is below:
✅ Total resources of the Industry & Logistics (I&L) market for the CEE-15 region exceeded 50 million sq.m.. Poland, as the largest market, accounts for almost 25 million sq.m..
✅ The total space stock of Small Business Unit and Last Mile Logistics on the CEE-15 markets amounts to over 3 million sq.m., of which Poland is approx. 2 million sq.m.
✅ Approximately 500.000 sq.m. of SBU / LML space is currently under construction in the CEE-15 countries, most of which (310,000 m2) is being built in Poland.
✅ Due to changes and disruptions in consumer behavior, production of goods and global supply chains caused by the pandemic and the war in Ukraine, the industrial and logistics space is the most sought-after asset both in the CEE region and globally.
Source: Colliers
The construction of the first logistics park financed by Newport Logistics Fund, has started near Łódź
Newport Logistics Fund is investing on the warehouse real estate market and has just announced the start of the construction of it's first fully financed logistcis center. Near Łódź the construction of a hall with an area of 6,300 sq.m., fuly leased by DPD - one of the largest courier companies in Europe, has started. The facility will be part of a complex of two buildings with a total target area of 32,000 sq.m.
In the logistics park in Lućmierz near Zgierz, financed by the Newport Logistics Fund, the construction of the first hall with an area of 6,300 sq. m. has started for the needs of DPD. One of the largest courier companies in Europe, whose sorting plants pass through 7.5 million shipments every day, will use the facility in the first quarter of 2023. The cross-dock building will house one of the largest and most modern sorters of this company in the country and functional office and social facilities.
The hall will be equipped with a number of sustainable solutions - incl. photovoltaic installation and electric car charging stations - and will be BREEAM certified at the Excellent level.
The logistics park developed by Newport Logistics Fund will ultimately cover two buildings with a total area of 32,000 sq m. The investment is being built in one of the main logistics centers in Poland and Europe, near the A2 motorway and the Emilia junction. 4 million people live here within an hour by car and as many as 180 million consumers within 6 hours. Excellent transport connections are complemented by the nearby Intermodal Container Terminal, connecting China with Western Europe.
"E-commerce is bursting at its seems, and warehouses are following."
We highly recommend reading interesting report by Cushman & Wakefield "E-commerce is bursting at its seems, and warehouses are following.". See our summary and key trends:
✅ 100 billion PLN value of the-commerce market in Poland in 2020 (100% increase over 2 years). The market is to grow by 20% annually and in 2025 reache the level of 250 billion PLN. The value of the EU market is 757 billion EUR, so Poland accounts for 3% of the online trade.
✅ 77% - the number of internet users shopping online (increase by 15% vs 2019). At the end of 2021, the number of stores registered online was 52.3 thousand. Already 20% of Poles buy all the non-food products online.
✅ 9% - share of internet sales in retail sales. By 2023 it is expected to be 20%.
✅ 25 million sq.m. - warehouse space in Poland after 1Q2022 (increase by 21% vs 2020 and 16% vs 2021). By the end of the year, the 30 million sq.m. of warehouse space is to be surpassed. The vacancy rate at the end of Q12022 is 3.3% and is falling down.
✅ 30.7% - giving 7.35 million sq.m. of warehouse space is used for e-commerce (+84% vs 2019). Due to market trends and the fact that e-commerce needs 3 times more warehouse space, this value will increase.
Source: Cushman&Wakefield
Still high demand for the warehouses
The demand for free spaces on the warehouse market is constantly increasing and rental prices are rising. Key highlights below:
✅ The pandemic and the war in Ukraine are disrupting the supply chains.
✅ Storage increases the security of companies. On one hand it ensures the continuity of deliveries as well as it ensures the continuity of sales.
✅ Storage of products close to the place of production or distrubution makes the most sense especially if the goods do not require reloading.
✅ The demand for warehouses will grow and the availability will decrease. Products are stored in the warehouses longer than before, what translates directly into lower rotation of goods.
Source: Puls Biznesu
Development of the warehouse and logistics market in Europe
How do the logistic european companies see the warehouse market? We highly recommend reading the CBRE report "European Logistics Survey 2022", as well as our key highlights:
✅ 75% of companies are looking for new warehouse space, because they want to improve their supply chains.
✅ 54% of eenterprises will go outside the big cities and look for the warehouses elsewhere to be more geographically diversited.
✅ 50% of companies want to expand their warehouse and industrial space by more than 10%.
✅ 84% of companies have experienced supply chain disruptions in the warehouse sector.
✅ 32% of comapnies are convinced that the problems will not end in 2022, but rather in 2023.
Source: CBRE
"Made in Poland" - future of European investments
"Made in Poland" is a very interesting report by JLL, Polish Investment and Trade Agency, Hays and ALTO, that offer holistic guidance to manufacturing companies for establishment and expanding their business in Poland. Key highlights below:
✅ Poland is strengthening its position as the leading industrial and logistics hub in Europe. During the last 10 years high-speed road network has expanded by over 200% and is now top 5 in Europe. A 8h driving time catchment area for Wrocław provides a combined access to population of over 70m.
✅ Poland with its 20m working age population (38m in total) is in top 3 in Europe and labour costs are one of the lowest. Additionally availability of land are a huge advantages of Poland’s emerging regions.
✅ Poland is the 6th largest commercial industrial real estate market in Europe. Still, the industrial real estate market has room for further growth, with a potential of as much as 25 million m2 of new warehousing and production space. Currently there are 25 million m2 of warehouses (doubled its size in just the last five years) but the vacancy rate is very low with 3.1% as of the 1Q2022.
Source: JLL
Daniel Raemy – joins the fund from the 1st of September 2022
We are pleased to announce that from 1st of September 2022, Daniel Reamy will join the NEWPORT Logistics Fund as a member of the Supervisory Board as well as member of the Investment Committee.
For the last 13 years, Daniel has been working for Bank J. Safra Sarasin, a leading Swiss private bank. As the CEO of J. Safra Sarasin Polska, he has successfully established the bank position on the Polish market. During this time, he has built up a wide network among Polish entrepreneurs and business leaders.
Before joining Bank J. Safra Sarasin in 2009, he had worked at UBS AG for 17 years, where he held several positions within private banking in Switzerland and then in Poland. Daniel studied at KV Zurich Business School in Switzerland and he holds a diploma of Certified International Wealth Manager CIWM from AZEK, Switzerland.
