Poland Leasing activity remains stable

Currently, 1.9 mln sqm are under construction (-22 pct Y/Y), marking the second-lowest development activity since early 2018. Despite challenges, leasing activity remained stable at 3.8 mln sqm, with a vacancy rate of 8.0 pct (+30 bps Y/Y) at the end of September 2024.

Transaction value revival in Q3

In the investment market, the total transaction volume for the industrial sector reached EUR 738 mln (-12 pct Y/Y), accounting for 27 pct of the overall investment volume in Poland. However, Q3 saw a significant improvement, with transactions totalling EUR 445 mln, representing a 46 pct share of the total volume. The market has revived, among other factors, thanks to the return of portfolio transactions, such as the acquisition of three Diamond Parks by the American investor Greykite from AIG/White Star and the takeover of shares in DL Invest by Emira Property Fund. As part of the new issuance, Emira acquired a 25 pct stake in the form of preferred equity, with an option to buy out DL Invest Group in part of the operational structures of the DL Invest Group.

In recent months, the Polish commercial real estate investment sector has shown signs of stabilization and recovery. The warehouse segment, in particular, has regained momentum after a challenging start to the year. Increasing investor interest in industrial and logistics portfolios is evident in the growing number of ongoing transactions. Fully leased warehouse assets in established core markets remain the most attractive.
Grzegorz Chmielak, Head of Valuation and Capital Markets, Axi Immo

Warehouse supply and development activity

At the end of September 2024, Poland’s modern industrial stock reached 34 mln sqm (+9 pct Y/Y). Development activity in the first three quarters totalled 2.1 mln sqm (-33 pct Y/Y), with 454,000 sqm delivered in Q3 alone. The largest volumes of new space were completed in the Dolnośląskie, Mazowieckie, and Łódzkie regions. Currently, 1.9 mln sqm are under construction (-22 pct Y/Y), the second-lowest level since 2018. The volume of new project starts also decreased significantly, with 1.2 mln sqm initiated from Q1 to Q3 2024 (-49 pct Y/Y). By region, the most active areas in terms of new developments were Dolnośląskie (571,000 sqm), Mazowieckie (331,000 sqm), and Śląskie (295,000 sqm). Developer activity on smaller markets has declined.

Stability in the leasing market

As of September 2024, the industrial market’s vacancy rate remained stable at 8.0 pct (-30 bps Q/Q, +20 bps Y/Y). The highest availability of space was recorded in the Lubuskie, Świętokrzyskie, and Lubelskie regions, at 20 pct, 16.1 pct, and 12.9 pct, respectively. Among the “Big Five” markets, Łódzkie had the highest vacancy rate at 11.2 pct, equating to 539,000 sqm of available space. The average vacancy rate for the five largest markets stood at 7.9 pct, aligning closely with the national average.

The Polish industrial market is entering a phase of stabilization, characterized by reduced development activity and a greater focus on tenant-tailored projects. Supply is adjusting to actual tenant demand, fostering more sustainable growth. While leasing volumes remain high, renegotiations account for a significant portion of transactions.
Anna Głowacz, Head of Industrial, Axi Immo

Increased need for warehouse space

Gross production and logistics space take-up in Poland totalled 3.8 mln sqm in Q1-Q3 2024 (+2.5 pct Y/Y). New deals and expansions dominated the leasing structure, comprising 61 pct of all transactions. The highest demand for industrial space during this period was recorded in Mazowieckie, Dolnośląskie, and Łódzkie. Major lease transactions in Q3 2024 included: CTPark Warsaw West Wiskitki, 63,000 sqm, retail (new deal); Prologis Park Łódź, 41,500 sqm, electronics & white goods (new deal) and GLP Poznań Airport Logistics Centre, 28,800 sqm, FMCG (renewal).

Stable prices with an upward trend

Base rental rates remained stable with a slight upward trend in new and planned developments, ranging from EUR 3.7 to EUR 5.5/sqm/month for big-box facilities. The lowest rates are observed in locations with repeatedly re-leased assets. Effective rental rates are approx. 20 pct lower than base rates due to vacancy levels and long-term lease negotiations.

Despite declining development activity and challenging macroeconomic conditions, the Polish industrial and logistics market in 2024 demonstrates stability. Investors and tenants continue to recognize the potential in key regions such as Warsaw, Łódź, Upper Silesia, and Lower Silesia, maintaining stable rental rates and offering prospects for further market growth. We anticipate strong tenant activity in Q4, traditionally the best-performing quarter of the year.
Renata Osiecka, Managing Partner, Axi Immo