"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.
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
