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Summary of Q1 and prognosis for the rest of the year according to Colliers International:

GENERAL OVERVIEW

  • At the end of Q1 2013 the total stock of modern warehouse space in Poland amounted to more than 7.48 mln m2. About 240,600 m2 were under construction, approximately 70% of which has already been leased.
  • In the first three months of the year, 128,100 m2 of modern warehouse space were delivered to the market, which is worse result compared with the corresponding period last year, when new supply stood at more than 194,000 m2.
  • Transaction volume reached over 351,300 m2, which marked a slight decrease as compared with the last quarter of 2012, in which 475,000 m2 were leased. A comparable amount of new agreements and negotiations could be observed, which constituted 51% and 49% of all transactions respectively.
  • The vacancy rate reached 10.2% showing a slight increase compared with Q4 2012, which was a result of increased supply and lower tenants’ activity.
  • Rents for warehouse space have remained rather unchainged in relation to the previous quarter. However, in regions where vacancy rates decreased, a slight upward trend in rental rates could be observed.trend was observed only in the regions where the vacancy rate was low.

SUPPLY

  • Warsaw – at the end of Q1 2013, the total supply of modern warehouse space in Warsaw’s three zones has not change and amounted to 2.6 mln m². There are currently approximately 55,800 m² under construction, the majority of which (63%) has already been leased.
  • Central Poland – in Q1 2013 the supply of modern warehouse space remained unchanged in comparison with Q4 2012 and amounted to 1 mln m². There are currently 19,500 m² under construction as part of the extension of Tulipan Park Stryków.
  • Poznań – the first quarter of 2013 did not bring any changes in supply of modern warehouse space in Poznań region with total stock remaining at the level of 900,500 m². There are currently 28,500 m² of space under construction, almost half of which has already been leased.
  • Upper Silesia – this region continues to be, right after Warsaw, the second largest industrial market in Poland. At the end of Q1 2013, the total stock of modern warehouse space increased by 46,500 m² and reached the level of 1.4 mln m². Currently 35,100 m² within 3 projects are under construction.
  • Kraków – Kraków is still one of the three smallest industrial markets in Poland. At the end of March 2013, the existing supply amounted to approximately 149,500 m².
  • Wrocław – the total supply of modern warehouse space increased in Q1 2013 by 44,300 m² to over 765,500 m². Currently, there are three projects under construction with a total area exceeding 35,300 m².
  • Gdańsk – at the end of Q1 2013, the resources of modern warehouse space increased by 14,000 m² (within Pomeranian Logistic Centre) and reached the level of 187,300 m².
  • Toruń – in comparison to both the last quarter of 2012 and the whole of the previous year, the total stock remained unchanged at the level of 96,200 m².
  • Szczecin – in terms of existing modern warehouse space, Szczecin remains the smallest industrial market in Poland. At the end of Q1 2013, the total stock amounted to nearly 42,000 m², which has not changed since the end of 2012. There are currently 6,900 m² under construction within the first phase of North-West Logistic Park.

DEMAND

  • Warsaw – the three Warsaw zones proved to be the most active markets in Q1 2013 in terms of transaction volume. During the first three months of 2013, 38 lease agreements were signed for a total area of 150,200 m². 67% of leased space in Warsaw was located in Warsaw zone II, while only 7% was located in Warsaw zone III. Among the transactions, renegotiations dominated the market and constituted 61% of tenants’ activity, while 39% was represented by new agreements.
  • Central Poland – comparable to the previous quarter, during the first three months of 2013 over 31,500 m² were leased in this region, which represents 9% of total transaction volume. 47% of all contracts were new agreements, while renegotiations represented 53% of tenants’ activity in the region.
  • Poznań – in comparison to Q4 2012, transaction volume in Poznań noted a slight increase and reached the level of 42,400 m² (leased within 6 transactions). New agreements dominated among the contracts and constituted 65% of all signed deals.
  • Upper Silesia – in Q1, more than 57,700 m² of warehouse space were leased. Among the contracts, renegotiations dominated and constituted 58% of all signed deals. In terms of transaction volume, Upper Silesia is in second position, right after Warsaw.
  • Kraków – in the first quarter of 2013, 3,400 m² of warehouse space were leased in Kraków within one new agreement.
  • Wrocław – in Wrocław nine agreements were signed for a total area of more than 55,200 m². Comparable to Poznań, new agreements dominated and constituted 71% of all signed deals. The transactions conducted in this region represent 16% of the tenants’ activity in Poland.
  • Gdańsk – in Q1 2013, two new lease agreements for a total area of 8,800 m² were signed, which represents 2% on tenants’ activity in Poland.
  • Toruń – during the first three months of 2013, no lease transactions were signed.
  • Szczecin – by the end of March 2013, one new lease agreement for an area of 2,100 m² was signed.

VACANCY

  • At the end of Q1 2013, compared to the end of the year 2012, the vacancy rate in Poland noted a slight increase and reached the level of 10.2%.
  • Warsaw – compared to Q4 2012, the vacancy rate increased from 11.7% to 14.2%. It reached 15.1% in Warsaw zone I, 15.6% in Warsaw zone II and 6.9% in Warsaw zone III. The biggest change in the ratio was noted in zone II, where it increased by more than 4 percentage points.
  • Regional markets – the lowest vacancy rate was observed in Poznań (2.3%), Upper Silesia (4.7%) and Wrocław (5.2%), while the highest rate occurred in Szczecin (19.6%) and Central Poland (17.5%).

RENTAL RATES

  • In Q1, rental rates remained unchanged in most markets. An upward trend was observed only in those regions where vacancy rates decreased in comparison to the end of 2012.

PROGNOSIS

  • Due to the development of third-party logistics sector (3PL) in Poland, increased interest of logistics operators in smaller cross-dock terminals can be expected.
  • Due to the decreasing vacancy rate, rental rates may show a slight upward trend in selected markets.

At the end of the first quarter of 2013 approximately 240,600 m² of modern warehouse space was under construction, the majority of which (70%) has already been leased. Therefore, we can expect that the vacancy rate will gradually decline. It is estimated that in the next quarter of 2013, demand will remain stable in most markets. A growing interest in new markets such as Szczecin, Białystok and Rzeszów is predicted.” – comments Tomasz Kasperowicz, Partner at Colliers International, Industrial and Logistics Agency.