50 percent of tenants occupying industrial and logistic space in the next three years plan to change their current location due to the need to rent a larger area or consolidation.
The vast majority of tenants say they are satisfied (77%) or very satisfied (17%) with existing lease terms.
Warsaw, 6 March 2014 – The report presents the results of the survey conducted by Colliers International among companies leasing industrial space in different regions of Poland. The survey’s results were collected and described in "Industrial market from tenants’ point of view".
The aim of the research was to identify the needs and expectations of tenants and trends in the Polish industrial market. The majority of respondents (77%) admitted that in the 12-24 month perspective the demand from the companies they represent for industrial space will subsequently increase. At the same time, none of them are planning to expand their business outside of Poland. Half of the respondents admitted that over the next three years, they plan to change their current location. The reason for this decision is the need to lease a larger area, consolidation, cost savings, choice of a better located building as well as corporate policy. Companies that declared that they do not plan to transfer their business to another location are mostly considering expansion in the current location or optimising currently leased spaced.
On the basis of research conducted by Colliers International, it can be concluded that the level of satisfaction with the currently leased warehouse and production space meets the expectations of the majority of tenants. The majority of respondents say they are satisfied (77%) or very satisfied (17%) with their current lease terms. Only 6% of respondents stated that the currently leased area does not meet their expectations.
The study shows that the most significant factors taken into consideration in the leasing process are financial aspects as well as the location, which were marked as 'very important' by the majority of respondents (76% and 71% respectively).
"One of the most important factors taken into account by the tenant in the decision-making process are the costs. The longer the term of the lease, the lower the price per metre. It should be noted, however, that due to the observed decrease in the vacancy rate in many regions in Poland, which is a consequence of the lack of speculative investments, it is currently less likely that price concessions can be achieved from developers. For the tenant, the key to lowering lease costs is to define the current and future needs of the company, as it enables a long term commitment to be made." says Tomasz Kasperowicz, Partner, Industrial and Logistics Agency at Colliers International in Poland.
Financial leasing terms must prove to be attractive enough to complement the offer of a warehouse or a logistic park. Agreements in the warehouse market are signed for a specific period of time, which guarantees the tenant the security of rent at a certain level throughout the whole term of the lease (unless both parties agree otherwise). Normally, they are conducted for a period of 3-5 years, while in case of BTS projects it can be as long as 20 years. Hence, the longer the lease term, the greater the opportunity to negotiate the price per square metre.
"In 2014 rental rents will become more diverse. Therefore, it is very important for tenants to begin early the process of market analysis and seeking adequate property in advance, especially in terms of medium and large surfaces. The effective rental rates for prime properties will tend to grow, while a further decrease in rents will be observed in the case of properties that remain vacant for a longer time, or location of which is unfavorable. The space delivered for a specific tenant will be cheaper than the existing space in the majority of cases." says Jan Barbasiewicz, Associate Director, Industrial and Logistics Agency at Colliers International in Poland