Tenant demand for modern logistics and manufacturing space in Poland is growing at a rapid pace. In H1 2017, warehouse supply totalled 707,000 sq m while take-up hit a record high of 1,786,000 sq m, as revealed in Cushman & Wakefield’s report “MARKETBEAT: Polish Industrial Market in H1 2017”.

1. MARKETBEAT
POLISH
INDUSTRIAL
MARKET
H1 2017

2. 1Cushman & Wakefield | Marketbeat - Poland Industrial Market
In H1 2017, occupier and developer activity hit a
record high on the Polish industrial market.
• Warehouse supply totalled 707,000 sq m, representing a
9% rise on the figure recorded in H1 2016.
• Poland’s total warehouse stock surpassed 11,790,000 sq
m, of which 86% is in the country’s five core markets:
Warsaw, Upper Silesia, Poznań, Central Poland and
Wrocław.
• Warehouse take-up hit a record high of 1,786,000 sq m
with a 39% rise compared to H1 2016.
• Net take-up, excluding lease renegotiations, accounted
for 76% of the leasing volume, up by 14 percentage
points on the level noted in H1 2016.
• The strongest leasing activity was in Central Poland,
Warsaw’s suburbs and Upper Silesia.
MARKET OVERVIEW
• The development pipeline stands at 1,665,000 sq m, of
which 77% is secured with pre-lets. Nearly half of that
volume or approximately 797,000 sq m will be delivered
in BTS schemes.
• Despite the high supply level, the vacancy rate
remained largely unchanged: down from 5.5% at the
end of June 2016 to 5.4% in June 2017.
• Headline rents remained flat on Poland’s largest
warehouse markets. At the end of June 2017, they
stood at EUR 2.40– 3.60/sq m/month.
• Effective rents, i.e. headline rents less financial
incentives, ranged between EUR 1.90 and 3.20/sq
m/month.
Development of modern warehouse market in Poland (2008 – 2017 Q2)
Source: Cushman & Wakefield
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0
2 000 000
4 000 000
6 000 000
8 000 000
10 000 000
12 000 000
14 000 000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2
(sqm)
Stock (sq m) Take-up (sq m) Vacancy Rate (%)
11.79 million sq m
Poland’s total industrial and logistics stock

3. 2Cushman & Wakefield | Marketbeat - Poland Industrial Market
At the end of June 2017, total Class A
warehouse stock in Poland stood at 11,791,000
sq m, following a 12% increase year-on-year.
The Polish industrial market continues its strong upward
momentum. In H1 2017, warehouse supply totalled
707,000 sq m, up by 9% compared with the same period
last year.
Most of the projects were delivered in Bydgoszcz-Toruń
(113,000 sq m), Poznań (112,000 sq m), Central Poland
(91,000 sq m), Upper Silesia (85,000 sq m) and Warsaw’s
suburbs (82,000 sq m).
Of the 34 projects delivered to the market in H1 2017, the
largest completions were: the next phase of P3 Błonie
(47,000 sq m), a BTS scheme for Agata Meble at Prologis
Park Piotrków II (42,000 sq m), two BTS schemes in
Bydgoszcz-Toruń for Kaufland (45,000 sq m) and
Carrefour (38,000 sq m), developed by Panattoni.
At the end of June 2017, there was 1,665,000
sq m of warehouse space under construction –
more than twice as much than a year earlier.
Due to robust demand, warehouse space is largely being
absorbed prior to completion. At the end of June 2017,
approximately 378,000 sq m of space under construction
remained vacant, accounting for 23% of the total
development pipeline. Nearly 800,000 sq m or 48% of the
pipeline is being developed in BTS schemes.
The highest concentration of development activity is in
Warsaw’s suburbs (375,000 sq m), Szczecin
(293,000 sq m - schemes for Amazon and Zalando),
Upper Silesia (282,000 sq m, of which 135,000 sq m is for
Amazon) and Central Poland (214,000 sq m). Other
markets seeing robust developer activity include Poznań
(129,000 sq m) and Western Poland, where Panattoni is
developing two BTS schemes (60,000 sq m for H&M in
Bolesławiec and 30,000 sq m for Reuss Seifert in Nowa
Sól).
At the end of June 2017, the largest volumes of warehouse
space being built on a speculative basis were in Warsaw’s
suburbs (115,000 sq m) and Upper Silesia (65,000 sq m).
SUPPLY
Project Developer
Area
(sq m)
Panattoni Park Grodzisk III Panattoni 66,000
P3 Poznań P3 57,000
Panattoni Park Grodzisk II Panattoni 43,000
Panattoni Park Pruszkow II Panattoni 39,000
Hillwood Marki Hillwood 39,000
Goodman Pomeranian
Logistics Centre
Goodman 37,000
Panattoni Park Sosnowiec
IV
Panattoni 36,000
SEGRO Logistics Park
Stryków
SEGRO 30,000
MLP Gliwice MLP 25,000
Supply H1 2017 (sq m)
Selected projects under construction, June 2017
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
Available space Leased space
Stock under construction, June 2017 (sq m)
Source: Cushman & Wakefield
Source: Cushman & Wakefield
Source: Cushman & Wakefield
1.67 million sq m
Development pipeline at the end of Q2 2017.
0
20000
40000
60000
80000
100000
120000

4. 3Cushman & Wakefield | Marketbeat - Poland Industrial Market
In H1 2017, warehouse take-up rose to a
record 1,786,000 sq m, representing a 39%
increase compared with H1 2016.
Tenant demand for modern logistics and manufacturing
space is growing at a rapid pace. In H1 2017, the
strongest leasing activity was in Central Poland where
423,000 sq m of warehouse space was leased under
twelve leases, most of which were for large BTS
schemes. Slightly lower leasing volumes were recorded in
Upper Silesia (414,000 sq m) and in the Warsaw region
(367,000 sq m, of which 333,000 sq m was transacted in
Warsaw’s suburbs). Significant occupier activity was also
noted in Western Poland (106,000 sq m) and Tricity
(84,000 sq m). New locations such as Kielce and
Bialystok in eastern Poland are also expected to grow,
benefiting from improvements of the road infrastructure.
New lease agreements accounted for 67% of all
transactions, while lease renewals and extensions made
up 24% and 9%, respectively. Take-up came mostly from
logistics operators and retailers, accounting for 32% and
20% of all deals, respectively. There is a growing demand
reported by light manufacturing (10%), e-commerce (9%),
the automotive sector (7%) and household appliances
(6%).
Leasing activity is expected to remain healthy in upcoming
months, supported by the robust economic landscape and
the rapid expansion of e-commerce in Poland.
TAKE-UP
Selected lease transactions in Poland, H1 2017
Tenant Warehouse Zone
Space
leased (sq
m)
Type of transaction
Amazon Panattoni BTS (Sosnowiec) Górny Śląsk 135,000 New transaction (BTS)
BSH Panattoni BTS (Łódź) Polska Centralna 79,000 New transaction (BTS)
H&M Panattoni BTS (Bolesławiec) Polska Zachodnia 60,000 New transaction (BTS)
Kuehne+Nagel P3 Piotrków Polska Centralna 56,000 New transaction
OBI Panattoni BTS Park Łódź II Polska Centralna 51,000 New transaction (BTS)
BMW BTS Świecko Polska Zachodnia 32,000 New transaction (BTS)
Arvato SEGRO Logistics Park
Stryków
Polska Centralna 30,000 New transaction
Żabka MLP Gliwice Górny Śląsk 25,000 New transaction
Electrolux MLP Pruszków I Warszawa-Okolice 23,000 Renegotiation
Take-up by regional markets in H1 2017 (sq m)
Source: Cushman & Wakefield
1.79 million sq m
Total take-up in H1 2017
Source: Cushman & Wakefield
0
100 000
200 000
300 000
400 000
500 000
Popyt netto Renegocjacje
67%
24%
Take-up Net
Renegotiations
Take-up net vs renegotiations in H1 2017 (%)
Source: Cushman & Wakefield

5. 4Cushman & Wakefield | Marketbeat - Poland Industrial Market
Vacancies
At the end of June 2017, the vacancy rate stood
at 5.4%, equating to 634,000 sq m of vacant
space, down by just 0.1 percentage point from
5.5% in H1 2016.
Despite the growing supply, continued solid demand kept
the warehouse vacancy rate in Poland at a stable low level
of 5.4%– 6.3% in the last twelve months. Compared to the
end of the previous quarter, the vacancy rates rose slightly
in Poznań (8.3%) and Wrocław (7.3%) and decreased in
Warsaw’s inner city (6.9%), Warsaw’s suburbs (5.7%) and
Upper Silesia (3.7%). The lowest warehouse vacancy rate
of 0.3% was in Central Poland with demand continually
outstripping supply. Robust developer activity in smaller
warehouse markets pushed vacancies up in Krakow
(38,000 sq m), Szczecin (19,000 sq m) and Lublin (18,000
sq m).
Rents
Rents have remained largely unchanged.
The highest headline rents are in Warsaw’s inner city
(EUR 4.00–5.25/sq m/month) and Krakow (EUR 3.50-
4.50/sq m/month) while the lowest are in Central Poland
(EUR 2.40–3.60/sq m/month) and Warsaw’s suburbs (EUR
2.50–3.60/sq m/month). Effective rents are lower due to
financial incentives offered to tenants and stand at EUR
1.90–3.20/sq m/month. Higher effective rents are in
Warsaw’s inner city (EUR 3.50–4.60/sq m/month) and
Krakow (EUR 2.80–3.60/sq m/month).
The upward pressure on rents caused by the growing
tenant demand was compensated in recent years by a
proportional increase in supply. Tenants continue to enjoy
the upper hand on industrial markets, benefiting from
intense developer competition such as Poznań, Krakow
and some locations in Warsaw’s suburbs. Rents are
edging up on markets with low volumes of vacant space,
including Łódź and Bielsko-Biała. Developers are also
more open to rent negotiations in the case of new projects,
particularly at the early commercialization stage and the
final development phase.
Rents are expected to remain flat by the end of 2017, but
will come under more upward pressure in the longer term
due to rising development costs, including prices of
building materials and services.
VACANCIES AND RENTS
Vacancy rates by regions, June 2017
Source: Cushman & Wakefield
0,0%
0,3%
2,5%
3,6%
3,7%
3,8%
5,7%
6,9%
7,3%
8,3%
8,8%
12,7%
13,9%
0% 5% 10% 15%
Western Poland
Central Poland
Rzeszow
Tricity
Upper Silesia
Bydgoszcz & Torun
Warsaw Suburbs
Warsaw Inner City
Wroclaw
Poznan
Szczecin
Cracow
Lublin
Region
Czynsz
nominalny
(euro/mkw.
/miesiąc)
Czynsz
efektywny
(euro/mkw.
/miesiąc)
Warsaw Inner City 4,00 – 5,25 3,50 – 4,60
Warsaw Suburbs 2,50 – 3,60 1,90 – 2,90
Upper Silesia 2,80 – 3,50 2,10 – 2,90
Poznan 2,75 – 3,40 2,10– 2,70
Central Poland 2,40 – 3,60 1,90 – 2,90
Wroclaw 2,90 – 3,30 2,00 – 3,00
Tricity 2,80 – 3,50 2,20 – 2,60
Cracow 3,50 – 4,50 2,80 – 3,60
Szczecin 3,20 – 3,50 2,45 – 2,90
Torun & Bydgoszcz 2,70 – 3,50 2,20 – 2,90
Rzeszow 3,20 – 3,50 2,50 – 3,20
Lublin 3,30 – 3,80 2,60 – 3,20
Western Poland 2,80 – 3,50 2,50 – 2,80
Zakres czynszów na rynkach regionalnych, marzec 2017
Źródło: Cushman & Wakefield
EUR 2.40-5.25
Headline rents for top class warehouse
space in Poland

6. 5Cushman & Wakefield | Marketbeat - Poland Industrial Market
SUMMARY H1 2017
Region Stock
(sq m)
Vacancy Rate
(%)
Supply
(sq m)
Under Construction
(sq m)
Take-up
(sq m)
Warsaw Suburbs 2,527,000 5.7% 81,000 375,000 333,000
Upper Silesia 2,107,000 3.7% 85,000 282,000 414,000
Poznan 1,720,000 8.3% 112,000 129,000 107,000
Central Poland 1,536,000 0.3% 91,000 214,000 423,000
Wroclaw 1,508,000 7.3% 41,000 59,000 117,000
Warsaw Inner City 693,000 6.9% - 20,000 34,000
Tricity 421,000 3.6% 53,000 37,000 84,000
Bydgoszcz & Torun 298,000 3.8% 113,000 35,000 30,000
Cracow 288,000 12.7% 40,000 59,000 60,000
Rzeszow 262,000 2.5% 5,000 55,000 30,000
Szczecin 217,000 8.8% 26,000 293,000 27,000
Lublin 129,000 13.9% 34,000 17,000 16,000
Western Poland 87,000 0.0% 26,000 90,000 106,000
Bialystok - - - - 4,000
TOTAL 11,792,000 5.4% 707,000 1,665,000 1,785,000
%
2,527,000
421,000
217,000
298,000
693,000
2,107,000
1,720,000
1,508,000
1,536,000
262,000288,000
129,000
KEY MARKET DATA
87,000
Intensity of
warehouse space:
very high
high
medium
low
Existing roads
Roads under construction
Planned roads

7. 6Cushman & Wakefield | Marketbeat - Poland Industrial Market
The industrial and logistics market will
maintain its growth momentum.
The Polish industrial market is in very good health and
is the fastest growing commercial real estate sector in
Poland. Tenant demand is expected to remain robust,
underpinned by optimistic growth forecasts for the
country’s GDP, consumption and retail sales in 2017,
further improvements in the road infrastructure and the
increasing impact of e-commerce.
This year’s total leasing volume is expected to surpass
last year’s record take-up of 3.1 million sq m. With the
development pipeline standing at 1.67 million sq m, this
year’s supply is also likely to hit a record high. As there
are few speculative projects underway, we do not
expect substantial changes in vacancy rates and rental
costs by the end 2017.
OUTLOOK
SELECTED TRANSACTIONS BROKERED
BY CUSHMAN & WAKEFIELD IN H1 2017
Tenant Warehouse Zone
Space leased
(sq m)
Type of transaction
Sonoco Panattoni Park Stryków II Central Poland 18,000 New transaction
Confidential Panattoni Park Zielona Gora Western Poland 14,000 New transaction
Omega Pilzno Goodman Pomeranian
Logistics Centre
Tricity 12,000 New transaction
DEDRA-EXIM MLP Pruszkow I Warsaw Suburbs 12,000 Renegotiation & Extension
DSV Road Panattoni Park Sosnowiec Upper Silesia 7,000 New transaction
AD Polska Wrocław Logistic Centre Wroclaw 6,000 Renegotiation
Nagel-Group Panatoni Park Poznań VIII Poznan 6,000 New transaction
Farutex Panattoni Park Lublin Lublin 5,000 New transaction
In H1 2017, the Industrial and Logistics Agency of Cushman & Wakefield advised on approximately
152,000 sq m of lease transactions, all of which were for Class A warehouse schemes.

8. 7Cushman & Wakefield | Marketbeat - Poland Industrial Market
DEFINITIONS
Definitions
Modern
industrial
stock
Total warehouse space delivered after
the year 2000.
Supply Volume of modern warehouse space
delivered onto the market in a specified
period of time.
Vacancy
Rate
Proportion of available industrial space
to the total stock at the end of a specified
period of time.
Take-up
(gross)
Total volume of industrial space leasing
transactions in a specified period of time.
Take-up (net) Total volume of industrial space leasing
transactions in a specified period of time,
excluding lease renewals/renegotiations.
Headline rent Rental figure being the output rate per
square metre of leasable warehouse
space offered by the owner.
Effective rent Headline rent minus all financial
incentives being the subject of
negotiations between the landlord and
tenant.
Build-to-Suit
(BTS)
development
Scheme constructed to meet specific
requirements of a tenant such as
location, area and technical/use
specifications agreed prior to
construction.
Pre-let Pre-let agreement signed prior to
construction or during the development
phase.
Standard lease terms
Rent
Monthly rent, paid in advance,
usually quoted in EUR and paid in
PLN.
Rent
indexation
Annual indexation based on the
consumer price inflation in the euro
area measured by the HICP.
Service
charge
Paid by tenants, connected with
costs and expenses directly related
to the maintenance of warehouse
space such as property
management, local taxes, security,
cleaning services, snow removal,
landscape maintenance and
lighting of vehicle manoeuvring
areas. Quoted and paid in PLN.
Typical lease
length
3–5 years
For BTS schemes: 7–15 years
Incentives
Full or partial fit-out of leased
space and rent-free periods:
usually 4–8 rent-free months at the
start of the lease, depending on
the lease size and length.
Rent
guarantee
Bank guarantee or deposit
amounting to 3–6 months of rent
and service charges plus VAT.

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Disclaimer
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CONTACT DETAILS
Adrian Semaan
Research Consultant
Industrial & Logistics Agency
+48 722 202 894
adrian.semaan@cushwake.com
Joanna Sinkiewicz
Partner
Head of Key Clients & Tenant Representation
Industrial & Logistics Agency
+48 722 202 011
joanna.sinkiewicz@cushwake.com