1Q2022 - summary of the warehouse market in Poland
✅ 25 million sq m - warehouse resources in Poland. Interestingly, in 2012 they amounted to 7 million sq m and in the next 5 years they increased by 60% to 11.5 million sq m to double again to this day. In 2023, it is to be 30+ million sq m.
✅ 4.8 million sq m - investments under construction, of which approximately 50% have been secured with lease agreements.
✅ 3.3% - vacancy rate (-0.5% quarter on quarter).
✅ 5-15% - rent increase. Headline rents are € 3.00-4.30 sq m / month for BIG-BOX projects and € 4.30-5.50 sq m / month for City Logistics / Small Business Units projects.
✅ 74% of the volume demand is new contracts and 26% are contract renegotiations.
✅ The main tenants of warehouses are companies from the logistics, distribution, courier and production industries.
Source: Cushman & Wakefield
Will the war in Ukraine stop the boom in the warehouse real estate market?
Poland is one of the most attractive market for warehouses and logistics. It encourages new investors and landlord to seek for a place for their business. Why is this happening and what impact will the war in Ukraine have on the warehouse real estate market? The answer to questions about the Polish and European warehouse and logistics markets can be found in the article by Szymon Ostrowski, managing director in Newport Logistics Fund, for Forbes.
Trends and growth directions on the warehouse market
At the end of April, Amazon informed that it had 'overextended' during the pandemic, which caused the 10% value reduction of the biggest developers both in USA and UK. What is the situation on the warehouse market and what are the expected trends:
✅ The demand will still exceed the supply, thanks to i.e. smaller e-commerce companies.
✅ Companies are trying to find the warehouse space closer to their outlets to avoid supply disruptions. swoich rynków zbytu, aby uchronić się przed zakłóceniami w dostawach.
✅ According to CBRE, vacancy rate in warehouses in UK is 1.5%, which is "critically low" level. Currently in Poland it is 3.6%.
✅ Rent increases will accelerate in the next year and are likely to force out some of the industrial companies, that can no longer afford rents paid by new companies.
Source: Financial Times
Newport Logistics Fund will finance the construction of a logistics park in Łódź
Newport Logistics Fund, a fund investing in warehouse real estate, will finance a logistics center with an estimated market value of EUR 37 million.
The first tenant of the logistics park is DPD - one of the largest courier companies in Europe.
The park with a planned area of over 32,000 sq m will be built in Central Poland (near Łódź) - one of the main logistics centers in Europe. It is also the first investment of the Fund in Poland.
Logistics park will consist of two buildings with a total area of over 32,000 sq m. It will be built on a 10-hectare plot in Lućmierz near Zgierz. The first of the facilities already has a tenant - the DPD company. The dedicated cross-dock building will house one of the largest and most modern sorters in the country. DPD is the largest parcel supplier in Europe. Each day, 7.5 million parcels pass through its sorting plants. Construction begins in early May.
The logistics park near Łódź, financed by the Newport Logistics Fund, will be built in one of the main logistics centers in Europe. 4 million people live here within an hour by car and as many as 180 million customers within 6 hours. Excellent transport connections are complemented by the nearby Intermodal Container Terminal, connecting China with Western Europe.
KKR to Build Warehouses as Demand for Space Outstrips Supply
According to Bloomberg News, one of the largest private equity funds, KKR & Co. Inc., began work on the construction of 8 new warehouses in the US.
"As the demand for warehouse space exceeds the supply (...) KKR is building new industrial properties."
Source: Bloomberg News
How is the Polish warehouse sector compared to the CEE region? - Cushman & Wakefield report
Against the background of the region, Poland fares very well with the potential for further growth.
✅ There are 46 million m2 of warehouse space in the entire region (54% of which is in Poland),
✅ The vacant space is 3.8%,
✅ Despite the highest supply (currently 4.5 million m2 is being built in Poland), the demand is growing dynamically every year (+ 50% for the last 12m).
✅ Logistics leads the way in the demand for warehouse space. Automotive and e-commerce will take 2nd and 3rd place, respectively.
✅ E-commerce in Poland is below 10% share in sales (vs. 15% in Germany and the Czech Republic and 19.6% globally).
✅ Rents in Poland are starting to rise, although they are still 44% lower than in the Czech Republic.
Source: Cushman & Wakefield
How does the war in Ukraine affect the warehouse market?
The situation is dynamic, but what you can see at the moment is:
✅ increase in demand for warehouses caused by the influx of companies from Ukraine and those leaving Russia,
✅ Poland is well positioned geographically,
✅ the supply of new warehouses is low, which, coupled with high demand and higher construction costs, will increase rents.
Source: Property News
Global transport problems create even higher demand for storage
“For most companies, today’s dysfunctional supply chains are a headache and a cost. (…) That points to stockpiling, which should boost demand for warehouses”.
Source: Wall Street Journal
Newport Logistics Fund established
It is our pleasure to inform that on the 4th of April 2022 Newport Logistics Fund S.C.Sp., SICAV-RAIF was established in Luxembourg as an investment company.
The investment objective of the Fund is to finance the full investment cycle related to the construction and commercialisation of various types of warehouse properties, located in strategic areas with good access to infrastructure. The fund will focus its activities on investments in Poland and European Union.
On the 11th of April 2022, Newport Logistics Fund S.C.Sp., SICAV-RAIF was registered on the official list of reserved alternative investment funds (RCS - Registre du commerce et des sociétés). This communication does not represent an offer to purchase partnership units or any other securities.
As Savills forecasts, the supply on the Polish warehouse market will continue to shrink.
"The situation beyond our eastern border will impact the logistics market as new facilities will have to be built to accommodate operations relocated from Ukraine. (...) Poland should maintain its stable position on the logistical map of Europe thanks to its strong fundamentals".
Source: Property Forum
