Report: Q in the warehouse market in Poland

Transcription

1 Report: Q in the warehouse market in Poland High volume of investments under construction against a falling share of speculative projects. Slow rent growth in selected locations. Net demand 434,000 Gross demand 720,000 The good macroeconomic performance of the Polish economy is having a positive effect on the warehouse market. Since the beginning of the year, demand has exceeded 2.54 million square metres, spurring on subsequent investments in Q3 an impressive result of 1.15 million of modern warehouse space was under construction. Developers are building on mass, but are less likely to take risks and are limiting speculative investments. High demand, falling staff availability and a limited number Under construction 1.15 mln New supply 870,000 Vacancy 5.6% of attractive investment areas are affecting rent levels in the market. Rents Compared to the Q Axi Immo Group Sp. z o.o Twarda Warszawa office@axiimmo.com

2 Demand G ross demand in the region amounted to 720,000, of which lease agreements and expansions market remains highly influenced by e-commerce, which generates high demand. This is revealed not only in direct made up 62%. This result is 23% higher compared with the same period last year. Despite this, due to record demand in the first half of the year (1.82 million ), at the end of 2017 we can expect last year s result of 3.09 million of leased warehouse space to be equalled or even exceeded. lease agreements between online stores and developers, but also in the growing number of contracts signed by logistic operators for external customers from this sector. A large group of tenants were companies from the automotive sector, whose share in gross demand amounted to over 11%. Most warehouse space was leased in the Warsaw region 155,000, of which over 138,000, or 90%, constituted contracts outside the city boundary. In the second place was with 134,000, and just behind it was with 105,000 of leased warehouse space. The largest new lease contracts in the third quarter 2017 were signed by: Agito in P3 Błonie (33,100 ), VIVE Group in Panattoni Park Kielce (26,300 ) and FM Logistic in P3 Piotrków (18,300 ). Major transactions in the past months also included the contract renewal and expansion of Moto Profil in Prologis Park Chorzów (44,300 The most expansive tenants in the third quarter of 2017 were logistic operators (over 30% of demand) and companies from the retail sector (13%). The warehouse ), Whirpool in Goodman Wrocław I (25,900 ) and the extension of the contract and expansion of Sarantis in MLP Pruszków II (14,400 ). Demand in regions in sq m Q Poznan Tri-City Szczecin West Poland Kielce Warsaw Inner City East Poland Cracow Torun/Bydgoszcz new agreements renewals 2

3 Selected the biggest lease transactions in Q Tenant Project Region Type of contract Sapce in sq m Moto Profil Prologis Park Chorzów Renewal and expansion 44,300 Agito P3 Park Błonie New deal 33,120 Grupa VIVE Panattoni Park Kielce Kielce New deal 26,290 Whirlpool Goodman Wrocław I Renewal 25,890 FM Logistic P3 Park Piotrków New deal 18,300 Sarantis MLP Pruszków II Renewal 14,400 Supply T he total supply of modern warehouse space in Poland in the third quarter of 2017 exceeded 13 Fully speculative investments are becoming fewer. At the end of September, their share in total warehouse space million square metres. This is the result of 1.59 million square metres of space being completed since the beginning of the year, of which 870,000 square metres, or nearly 55%, were investments completed in Q3. Supply growth is very high. For comparison, in the third quarter of the previous year, 390,000 were completed, which means an increase of 223%. under construction fell to 20%. Investments secured by lease agreements and dedicated to individual tenants (BTS) are predominant. Developers are actively working on other projects, preparing land and building permits, but they only launch new projects after signing at least 1-2 pre-let contracts. Apart from the logistic center built in Sosnowiec for Amazon (135,000 ), the largest warehouse investments As a result of the signing of a large number of leases in the first half of 2017, at the end of the third quarter a high level of warehouse space under construction, over 1.15 million, was recorded. For comparison, in the analogous period of 2016, there were 955,000 (an increase in Q by 20%) under construction. More are currently being built in. These include BTS projects carried out by Panattoni for: Castorama (100,000 ) in Stryków, BSH (79,000 ) in Łódź and OBI in Łódź-Nowosolna (50,000 ). A logistic center for Kuhene Nagel (56,000 ) in Piotrków Trybunalski prepared by P3 is also under construction. than 70% of space under construction will be completed by the end of this year. Most space is being built in (over 356,000 ), in (219,000 ) and in the Warsaw region (212,000 ). 3

4 Stock and vacanacy rate at the end of Q % ,5% % ,5% 0 0% Warsaw Inner City Poznan Szczecin Tri-City Cracow East Poland Torun/Bydgoszcz West Poland Stock in Vacancy % Vacancy rates Rents A t the end of the third quarter of 2017, the vacancy rate in the Polish warehouse market was 5.6%, D ata on rental rates in the last few quarters clearly shows a change in the current trend a move which means a slight increase of 0.1 p.p. compared to the corresponding period of The largest amount of free space available immediately was recorded in Malopolska (9.3%) and Poznan (8.5%), as well as in the Warsaw region about 7.9% (in the city and in III zone, about 50 km away from the capital). The lack of free warehouses is most often felt by tenants in, where the vacancy rate is 1.79%. towards rent increases for warehouse space is visible. On the one hand, this is the result of internal changes in the market, including vacancy levels and number of speculative investments. On the other hand, there is the overall macroeconomic situation, including the increase in labour costs, which in turn is reflected in rising investment expenditures. New investments are more expensive than two or three years ago, also due to the limited supply of land following changes in the law governing the purchase In most locations, there is a downward trend in vacancy rates due to less interest in speculative investments by developers. Instead they increasingly prefer pre-let investments secured by lease agreements, preferably for 5 years and longer, as well as BTS or BTO (fee development), which they are able to deliver not only in of agricultural land in April The most attractive effective rents are obtainable in the Warsaw area (EUR / ) and in Poznan (EUR / ) Locations with the highest rates for warehouse space are Krakow (EUR / ) and Łódź (EUR / ). the main warehouse markets. 4

5 Effective rents in regions (EUR/sq m/month) in Q ,2 3,0 3,1 3,0 2,4 2,5 2,2 1,9 2,0 1,9 2,7 2,3 2,8 2,5 3,5 2,9 2,8 2,7 3,2 2,6 2,5 2,5 1 0 Warsaw Inner City Poznan Tri-City Cracow Torun/Bydgoszcz Szczecin East Poland Effective rents (EUR/ ) Forecasts O On the demand side, by the end of 2017 we expect a similar result to last year with approximately The share of five-year contracts will gradually increase in the structure of lease agreements, which are gradually 3.09 million of leased space or even a few percent higher. Positive economic forecasts, high internal consumption and foreign investment will encourage tenants to enter into new contracts and expand existing ones. replacing three-year contracts, which two years ago were considered as the market standard. Rental rates are showing a general upward trend as a result of the low availability of A-class space available immediately and the relatively low number of speculative In upcoming quarters, developer s activity will remain high. We expect further growth in the popularity of BTS and BTO investments, which will edge out speculative projects. Encouraged by the good economic environment, investments under construction. In the next few months, we can expect a gradual correction of the current low rental rates, also due to the growing spending on new warehouse investments. developers are securing more land for the construction of logistics and warehousing centers, also in emerging markets outside the main warehouse hubs. 5

6 Contact Anna Głowacz Head of Industrial - Leasing Agency anna.glowacz@axiimmo.com Monika Rykowska PR & Marketing Director monika.rykowska@axiimmo.com Barbara Szymańska-Wieczorek Industrial & Research Coordinator b.szymanska-wieczorek@axiimmo.com Copyright 2017 AXI IMMO. All rights reserved. The information contained in this document is proprietary to AXI IMMO and shall be used solely for the purposes of evaluating this proposal. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of AXI IMMO. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof. We would like to be told of any errors in order to correct them. Axi Immo Group Sp. z o.o Twarda Warszawa office@axiimmo.com