We use cookies to make sure our website better meets your expectations.
You can adjust your web browser's settings to stop accepting cookies. For further information, read our cookie policy.
IN Warsaw
Exchange Rates
Warsaw Stock Exchange - Indices
The Warsaw Voice » Special Sections » March 3, 2014
The Real Estate Voice
You have to be logged in to use the ReadSpeaker utility and listen to a text. It's free-of-charge. Just log in to the site or register if you are not registered user yet.
Warehouse Market: Cause for Optimism
March 3, 2014   
Article's tools:

Ben Bannatyne, managing director of Prologis for Central and Eastern Europe, talks to Andrzej Ratajczyk.

The Polish economy slowed markedly in 2013. What impact did this have on the Polish warehouse property market and on companies like Prologis?
Obviously, the weakening of the economy affected the whole industry. The beginning of last year was still very good. But a slowdown became visible in the second half of the year. So it comes as no surprise that our expectations regarding demand were not fulfilled. Consequently, our results for the full year were worse than expected. However, the numbers alone do not fully reflect the situation on the market. The reason is online retailer Amazon’s entry into Poland—it decided to build three large distribution centers in this country. These deals contributed to a significant improvement in the performance of the sector. But the general trend was downward.

It is worth noting that last year there were considerable differences among individual Polish regions in terms of demand. A big drop in demand was recorded in Silesia, especially in the city of Chorzów. Meanwhile, in such locations as Wroc³aw, Poznań and Szczecin, demand increased.

In 2013, Prologis leased out 1.15 million sq m of distribution space in Central and Eastern Europe. How did Poland perform compared with other countries in the region?
Last year, the Polish market performed worse than the Slovak and Czech ones, for instance, as they remained stable. But we expect that the Polish market will see rapid growth this year and especially in 2015. Poland is the largest market in the region. For this reason investors and the capital market treat it almost on a par with Germany, France and Britain.

Investors, particularly those from Germany, but also from Scandinavia, are interested in investing in Wroc³aw, Poznań and Szczecin because labor costs are still lower in Poland, while at the same time the transport of goods from Polish warehouses to Western Europe is easy.

In which sectors is demand for modern warehouse space the biggest? Are there any new trends on this market?
Shopping chains are now among the tenants leasing the largest amount of space in terms of warehouse facilities. However, the number of e-commerce companies present in distribution centers is growing rapidly. These companies mainly focus on providing services for clients in Western Europe rather than Polish or Eastern European ones. This is why they choose locations close to Poland’s western border. Many significant lease agreements for warehouse space were signed with companies operating on the traditional and online retail market. It is projected that this trend will continue in the coming years. In cities such as Wroc³aw and Poznań there is also high demand from manufacturers, especially light industry.

As regards trends, a process of warehouse space consolidation by retail operators has become visible. Some operators who had 30 or 40 distribution points are consolidating them to three or four points. Another trend, which we have noticed among our clients and investors, is a preference for locations close to large cities. As road infrastructure improves it is much easier to plan investment projects.

Which Polish cities are the most attractive for tenants in terms of warehouse facilities? In which regions were investors most active in 2013?
Warsaw, Poznań, Wroc³aw, Silesia and central Poland, especially £ód¼ and Stryków, where two freeways intersect, have always attracted the most interest. We are not seeing any development in Eastern Poland. As regards the north of Poland, Szczecin is an attractive location because of its proximity to Western Europe and Scandinavia. Another attractive city in the north is Gdańsk, where smaller projects are being carried out.

The Wroc³aw region was the most important for investors in 2013. The highest demand for modern warehouse space was seen on this market, with developers responding immediately to the growing demand. Also attractive was the Poznań region, where both tenants and developers were very busy in 2013.

The real estate market, especially warehouses and industrial space, is considered to be an economic barometer. Signs of revival appearing on this market are taken to indicate that the wider economy is also about to strengthen. Do you agree with this opinion? If so, is the present situation on the warehouse market a harbinger of an economic revival?
Indeed. Virtually all tangible goods pass through a warehouse. If people start buying more, more goods have to be stored in warehouses. Sometimes it is necessary to expand them or build new ones. Retail operators and manufacturers enlarge their warehouse space because they want to be ready for the anticipated increase in demand for their products. It looks like consumption is now on the rise, indicating that the Polish economy has started to expand. This year promises to be a good one for the warehouse property market, with both demand and supply projected to grow. The expansion of the market will be accompanied by an evolving supply chain, which will become more efficient.
Latest articles in Special Sections
Latest news in Special Sections
Mercure - The 6 Friends Theory - Casting call
© The Warsaw Voice 2010-2018
E-mail Marketing Powered by SARE