Down from the Covid peak

Despite the war in Ukraine, the Polish warehouse market has been looking in reasonably good shape. Especially considering that the heyday of the sector, which took place during the pandemic and in its immediate aftermath, was something of an anomaly

In mid-September, around 200 people came together in the main clubroom at Legia Warsaw football stadium to discuss the main issues facing the industrial real estate sector. The weather on the day was fine, so those attending were happy to step outside into the stadium’s stands before the conference and later during the coffee and lunch breaks. On these steep rows of empty seats, you could soak up the sun, drink your coffee and chat with a perfect view onto Legia’s green and perfectly level football pitch.

When the conference itself finally got underway, Przemysław Sienkiewicz of Manpower Group was the first to take the stage. He spoke mainly about the labour market, but from his presentation it was clear that the worst times for the sector are already behind us. “If we look at the demand for labour, we can see that the period of stagnation is over,” he said. Salaries in the logistics and warehousing sector have increased by 10–15 pct in one year and, in his view, this trend will continue into next year. As he went on to explain, the solution for recruiting the required talent lies in ESG, since activity in this area increases the attractiveness of employers in the eyes of potential employees.

After this, it was time for a panel discussion in which the main topic was the situation in the development sector. “The market is evidently slower than it has been, but if we disregard the Covid spike we had in recent years, there has actually been an increase in development,” pointed out Marek Dobrzycki, Panattoni’s managing director. The current demand is not only being driven by logistics companies, but increasingly by manufacturing. What has improved, if only in the eyes of landlords, is the level of rent. “According to our data for the last few quarters, rents have risen from EUR 3.7 to EUR 5.5,” revealed Daniel Bienias, the managing director of CBRE in the CEE region, who moderated the panel.

Before the coffee break, it was the turn of warehouse investors to take centre-stage for an engaging debate about their sector. It was moderated by Jakub Ziółek, a managing partner of Crido. “We are seeing a decrease in transaction volume for the entire investment market, where logistics has nonetheless been the best performer. We have also not been seeing any portfolio transactions,” said Jakub Ziółek. The high interest rates and strong competition for talent have also added to that picture. “The market is slowing down, but this is not a crisis because tenants are still paying their rents,” insisted Waldemar Grabka, a senior director of EQT Exeter. He also believes that players will continue to invest because the market is attractive, but there will be less money available to do so.

After the coffee break, Wojciech Skwarcewicz of Solaredge Technologies gave us his insights into the use of photovoltaics in the warehouse sector. He showed how these types of installations reduce a building’s operating costs and environmental impact. These and other ESG aspects were also discussed in the panel discussion that followed. “About 80 to 90 pct of clients ask us in the initial negotiation phase what we can offer them in terms of ESG,” revealed Ewa Zawadzka, MDC2’s development manager. Green certification is the most common requirement, but sometimes it has to be at a very high level due to the tenant’s corporate policy.

Anything to do with savings is important, including PV and BMS systems. Tenants are also increasingly asking for green space within the parks, sports fields, recreation areas, bicycle parking and charging stations for electric vehicles – all of which are gradually becoming standard in warehouse projects. Damian Olko, a senior economist at WBK Lawyers, stressed that the most important change in logistics will be the introduction of emissions trading for new sectors, including transport. All fuels will be burdened with additional emission costs. Another important change will be the introduction of emissions trading for building heating. Eventually, almost all industries and the entire economy will be burdened with additional emission costs. “The events of recent years and the energy transformation in Germany show that not all of the latest solutions and ideas are well founded and properly calculated and may need revision. In any case, however, there are difficult years ahead of us that we must prepare now,” insisted Damian Olko.

The final panel discussion was on automation and robotics in the warehouse sector. One of the topics that received a great deal of attention was the Robot as a Service trend. The RaaS business model involves the hiring of logistics robots to enable logistics processes to be quickly adapted to the changing demand for warehouses “This represents a really positive push for small companies or those that don’t want to invest a lot of money in robotisation,” stressed Ilona Miziewicz-Groszczyk, the sales and marketing manager of Hisert. After lunch, a guided tour of the stadium was provided. And at the very end of the conference, the discussion moved to the more informal setting of Panattoni’s VIP lounge, where the guests could chat over a snack and a glass of wine.

Rafał Ostrowski