"When a product cannot be found on a shop shelve, this means the product was so good it has sold out. So in my opinion the warehousing sector is set to see good times within the next years. However, supply could be the problem as it is very low in Poland, compared to the Western markets. There are enough investors with capital on the market and therefore what was to be sold in Poland has been already sold. Some developers keep the product in their funds, which makes supply even lower," said Robert Dobrzycki, Mchief executive officer Europe, Panattoni Europe.
"This market will be developing in a very healthy way for the next couple of years. At least 1 mln of sqm of new warehousing space should be delivered each year. So in eight years’ time, the total stock should be twice as big," said Robert Dobrzycki. "Speculative projects are profitable, given the costs involved, as either the construction costs and the value of the investment plots are not reaching their highs, keeping fundamental issues on a positive note. It is essential to not overheat the submarket though. For instance, if the market is 1 mln sqm large and you built 50,000 sqm more, the vacancy rate would go up significantly and the market would be dysfunctional for a while, the rents would fall dawn. So one has to be careful. Vacancies impact the market, the size of the submarket also matters. Gdańsk is a good example. There are a lot of developers and investors there but demand is relatively low, so if we delivered more space on this market, in the short term it get destabilized, but in the long term it will do fine," he explained.
He added, that: "Apart from such basic truths as ‘the new is better than the old’, for now the economic factors, including the capitalization rate and market yields, make the modern space more attractive than old space because of the construction costs and rent rates. Old projects are based on the old cost estimates. For example, in 2008, when the market was peaking, the construction costs were 20-30 pct higher than these day. Now capitalisation rates and the costs are favorable to the developers of new projects, it is cheaper to lease space in a new building than in an old one. Of course, owners of such buildings should acknowledge this situation and adjust rent rates accordingly."
