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The Warsaw Voice » Real Estate » November 30, 2010
Warehouse Market
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New Project Reflects Market Revival
November 30, 2010   
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Błażej Ciesielczak, Country Manager for Goodman Poland

The year now ending has witnessed continuing improvement in the market for warehouses and logistics centers, with two predominant trends. Property groups have let space that was previously vacant, and they have also started new pre-let build-to-suit projects, designed to meet the specific needs of an individual customer. The greatest activity in the market has been shown by firms from the trade and production sectors. Meanwhile, with the memory of the crisis still fresh, customers have taken a very cautious approach to new investments, paying particularly close attention to the financial security of projects.

The market revival is confirmed by the start of Goodman’s first “on spec” project in Poland in the last 18 months. Construction commenced in October on a 14,000 sq m warehouse near Cracow, which is 27 percent pre-leased by Cracow-based company SCOT. It is possible to go forward with an investment of this type when the investor is confident that it will find further customers and also has the necessary financial strength. Goodman is one of the few property groups that has financing assured from its own funds. This means that the potential customers face no risk, even indirectly, and they can be sure that the building will be delivered on time and on budget.

Next year we should observe a continuation of the current trend of a revival in the market and further growth in demand. In time, the Polish market should catch up with Western markets such as Germany and France, where the revival is already clearly visible and more new projects are taking shape. On the other hand, a factor slowing the growth of the Polish market is the vacancy rate, which impacts results and can translate into a limited number of new investments.
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