New spots on the map

Most of warehouse space is still delivered in Poland’s major agglomerations. However, there is a growing interest among tenants and developers in smaller cities that may soon gain in importance. According to Colliers International experts, warehouse locations with best prospects ahead are as follows: Białystok, Legnica/Bolesławiec, Częstochowa, Kielce, Konin, Lublin, Radom, Rzeszów and Zielona Góra.

“When selecting specific space, logistic and production companies take into account not only location, but also availability of skilled manpower and recognized academic centres. In coming months, the growth dynamics of warehouse market in Poland will remain stable in terms of both supply and demand. We predict further development of smaller warehouse markets, among others, Toruń, Bydgoszcz, Lublin, Rzeszów, Szczecin, as well as new locations outlined in the report,” says Dominika Jędrak, Director at Research and Consultancy Services, Colliers International.

Some of the markets discussed in the report, for instance Konin or Legnica, are situated in close vicinity to main communication routes, which adds to their attractiveness. However, there are planned expressways and motorways extensions in all the cities presented in the report, which will facilitate communication in these regions. For example, local authorities plan EUR 40 m worth investments in the development of logistic infrastructure in Białystok by the end of 2018.

Among advantages of the locations discussed in the report are lower wages (even by dozen or so percent) and the availability of manpower that begin to lack in the most popular locations.

“The undeniable advantage of regional markets is a considerable number of working age population, reaching even 200,000 people, which provides a solid base of potential workers with a relatively high unemployment rate and limited competition from other market players. A lower level of salaries is yet another factor in favour of opting for smaller towns," explains Paweł Kopeć, International Account & Bid Manager, Randstad Poland.

A number of experts quoted by Colliers International report underline that the availability of skilled employees and a possibility of cooperation with universities are main factors that decided about opening their businesses in a specific region.

What also contributes to the attractiveness of 9 locations outlined in the report is location in special economic zones, which may be a significant factor for investors when making the decision.

There are already modern warehouses in a few locations presented in the report, for instance, Konin, Lublin or Legnica/Bolesławiec. This confirms that developers see potential in these markets. Nonetheless, there are locations that still lack modern warehouse space, e.g. in Białystok, Radom and Kielce, albeit this could change in time. A development of 17,000 sqm logistics park is planned in close proximity to Kielce. In turn, developers are securing investment lands in other locations, particularly in Białystok and Częstochowa.

Warehouses on the growth path

At the end of 2016, the total supply of modern industrial-warehouse space in Poland exceeded 11.2 m sqm. Poland’s warehouse market is still growing. From 2014 to 2016 approximately 3.3 m sqm of modern space was delivered to the market, while 2016 turned out to be record-breaking with approximately 1.3 m sqm. At the end of 2016, there was around 1.5 m sqm under construction out of which 76 percent are already leased.

Colliers International experts expect further expansion of particularly German and Scandinavian companies which build their distribution centres mostly in the western part of Poland. They also expect further inflow of investments of companies from industrial sector from other European countries and USA. BTS (built-to-suit) and BTO (built-to-own) transactions will still have a big share in the market, in which clients commission developers to construct “built-to-suit” development for lease or ownership. According to Colliers International analysts, there will be an increase in the supply of industrial space built within warehouse parks, where at least part of facilities will be delivered speculatively.

Employee wanted

According to Randstad Poland, one in three companies plan to increase their employment in the upcoming six months. Recruiting skilled manpower is becoming an increasing challenge for employers, which is why for a few years now the Polish labour market has transformed into the “employee market”. Moreover, it starts to lack manual workers in the most popular locations. This is particularly visible in the vicinity of Poznań, Wrocław, Warsaw or Katowice, where the unemployment rate dropped below 3 percent. In this situation, companies look for labour force in the neighbouring counties and voivodships, with the free daily transport ensured by the employer becoming a standard. Also, the employment of foreigners (mainly from Ukraine) has become a necessity in these regions. Almost 1.5 m workers from countries east of Poland are now working in Poland. Unfortunately, source of manpower may soon dry up. In February 2017, the European Parliament negotiators and Maltese EU presidency agreed a resolution regarding visa-free travel to the EU for Ukraine and Georgia, effective from June this year. Visa liberalisation for Ukrainian and Georgian citizens may result in many of them moving to the west of Europe.