Warehouse developers now more cautious

Pre-leases are now an important criterium

Currently, the highest investment activity is seen for projects that have a secured pre-leasing level of at least 50-60 pct of the space. This level of occupancy is often a prerequisite for the start of construction - developers today are placing great emphasis on reducing risk, which makes fully speculative developments rare.

The market has clearly become polarised. On the one hand, there are players such as GLP, CTP and Hillwood, who are still actively developing speculative projects - mainly in prime locations where demand is stable and predictable. On the other hand, some developers prefer the pre-lease model, launching projects only after leases have been signed.

BTS (build-to-suit) and BTO (build-to-own) projects are still an important market segment, especially for tenants with specific technical requirements or who are interested in facility ownership. However, they are being developed selectively, mainly by experienced developers that specialise in bespoke solutions.

Brownfield sites are also gaining importance - particularly for urban logistics centres due to the limited availability of land in towns and cities. Although their market share remains small, this trend is gradually strengthening.

The focus today is on projects that have the right level of pre-leases, rather than a specific type of investment. It is the availability of the client and the level of security of tenancy that determines whether a project will go ahead - whether we are talking about a speculative, BTS or BTO project.

ESG - no longer a competitive advantage, but a necessity

Green certifications such as BREEAM and LEED are increasingly becoming the market standard in the warehouse sector. It is now difficult to find a new project that does not already include environmental certification at the planning stage. A minimum level of BREEAM Very Good is now the norm, and most developers developing A-class facilities are aiming for Excellent.

BREEAM Outstanding-certified warehouses are also already appearing on the market, demonstrating the industry's growing commitment to sustainability and the increasing ambition of developers. For investors, ESG is becoming one of the key criteria and it influences not only their decision to commit to a project, but also its subsequent valuation.

It is worth noting that certification nowadays also has a measurable impact on financing. Banks financing investment projects are increasingly making loan conditions dependent on ESG scoring, where environmental certificates play an important role. As a result, they are ceasing to be merely an image tool and are becoming a real value-building element for properties.

In summary - environmental certification is no longer a competitive advantage, but a binding standard. In many cases, it is even a prerequisite for a project to be developed or sold.

Investment inhibitors

One of the most common barriers delaying the development of warehousing and production projects are protracted administrative procedures, especially those required to obtain an environmental decision or a building permit. Manufacturing developments in large cities encounter the most problems, where environmental proceedings alone can even take up to two years.

The last three years have also shown how challenging it has become to secure adequate power connections, especially for companies planning to open manufacturing plants in Poland. The increasing demand for power, combined with the limited availability of development land, makes it increasingly difficult to find a plot of land with quick access to electricity. The lead times offered by energy operators often come to several years, which can significantly hinder a smooth project launch.

Additional barriers include:

• the lack of local development plans, forcing investors to apply for development condition decisions,

• complex administrative procedures, especially for projects planned near residential buildings,

• unsettled property issues - including legal disputes, claims or the need to merge plots.

It is production projects that most often face the greatest formal and legal challenges. The availability of infrastructure and the length of administrative procedures are now becoming key factors that have a real impact on the pace of investment.