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The Warsaw Voice » Business » August 29, 2012
Business & Economy
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Poland to Become European Logistics Center
August 29, 2012   
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Real estate analysts predict that by 2020 Poland will become the main logistics center in Europe.

The latest research conducted by real estate services company Colliers International indicates that the market for logistics and industrial space will be gradually growing in the next 10 years, with Poland and Turkey the countries with the biggest potential. One of the main factors driving changes on the market, according to Colliers International, is economic growth in Eastern Europe, which will contribute to the development of new infrastructure and the European supply chain. Poland is expected to become the main logistics center, benefiting the most from the new infrastructure and from growing producer and consumer demand.

Turkey is another country expected to experience a boom on the logistics market. Istanbul’s rail connection with Europe is expected to be extended by an extra 14,000 kilometers in the next decade, contributing to a rise in freight traffic across Europe’s southeastern border. Turkey’s new ports will improve heavy transshipment traffic in the eastern part of the Mediterranean. Colliers experts believe that the ports of the North Adriatic will also gain in importance as their transshipment capacity increases. There will be a marked growth in trade between Europe and Asia with the use of existing and new supply chains. And the next decades will see the growing importance of China and India in global trade.

The expected third place of Poland in terms of consumer spending and production growth in Europe means that the country will be playing a huge role on the European logistics market, says Karel Stransky of Colliers International. In Turkey, rail and sea transport will also grow significantly, largely because of higher production activity in Asia and the flow of products through Europe’s southern transport routes. Stransky adds that if infrastructure development plans are carried out, there will be a real boom on the European distribution and logistics market in the next 10 years.

Among the distribution centers that Colliers expects to grow the fastest by 2020 are several Polish cities: Gdańsk/Gdynia, ŁódĽ, Katowice and Wrocław. Recent statistics for the warehouse lease market confirm the prospects of the logistics sector in Poland. A total of 560,000 sq m of warehouse space was leased in the first half of this year. Most of the space—70 percent—was leased under new agreements, according to a report published by real estate services company Jones Lang LaSalle to sum up developments on the Polish warehouse market in the first half of 2012. Poland’s largest logistics centers continued to be the locations most popular with tenants, with 138,000 sq m, or 25 percent of the overall demand in the first half of the year, leased in the southern region of Upper Silesia. Around 108,000 sq m of warehouse space was leased in the vicinity of Warsaw, 101,000 sq m in central Poland, and 91,000 sq m in the southwestern city of Wrocław.

“The logistics sector continued to lease the largest amount of warehouse space,” says Tomasz Olszewski, director for warehouse and industrial space in Central and Eastern Europe at Jones Lang LaSalle. “In the first half of 2012, companies operating in this sector signed lease agreements for 253,000 sq m and had a 45-percent share of the market.”

Some 333,000 sq m of warehouse space was constructed in the first half of 2012, twice as much as a year earlier. The largest amount of new space—68,000 sq m—was built in the vicinity of Warsaw. Around 59,500 sq m of new space was delivered in the midwestern city of Poznań, strengthening the position of the region as Poland’s third largest market for warehouse space. Central Poland and Upper Silesia also gained a significant amount of new warehouse space—41,200 sq m and 37,900 sq m respectively.

Tenants should remember that developers are still focusing on pre-let and build-to-suit projects while the amount of speculative projects is slight. Only 8.3 percent of warehouse space was under construction as speculative projects at the end of the first half of the year. “The shortage of speculative space has been felt on the market for a long time,” says Olszewski. “Now, this is coupled with the diminishing potential of existing parks. Developers have already almost fully developed the land they bought at the peak of the boom in 2008.” The Polish market for warehouse space is facing a large supply gap. Developers will probably respond to this situation soon and start speculative projects.

In their report, the Jones Lang LaSalle experts warn tenants against delaying decisions to lease warehouse space. “The situation on the market for warehouse space is now totally different from what it was in the middle of last year, when tenants could pick and choose among facilities on offer,” Olszewski says. “But with the dwindling supply of vacant space and a shortage of speculative projects, it is not now easy for tenants to find suitable warehouse premises. Companies looking for large modules may have the biggest problem because the space that is available now is very fragmented.”
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