Pomerania is one of Poland’s hottest industrial and warehouse markets. While some Polish regions began to slow down in the first quarter of this year, Tricity recorded another decline in vacancy rates and a shortage of prime stock, both existing and under construction, with occupier demand remaining strong.
The success of Tricity’s warehouse market hinges on the development of the harbour infrastructure in Gdansk and Gdynia. The region’s key strength lies in its excellent road connections with the rest of the country, including the A1 motorway (north-south) and the S7 expressway (running to Warsaw and Krakow). The cargo airport in Gdansk complements road and sea transport facilities. The S6 expressway, which is currently under construction, will provide added impetus to the market’s growth westwards – towards Szczecin and Berlin.
Gdansk and Gdynia harbours gain in importance
Tricity’s seaports are playing an increasingly important role in logistics across Central and Eastern Europe. In the first quarter of this year, Gdansk harbour rose to second place in the ranking of Baltic seaports. Since 2016, the container traffic (in TEU) in Gdansk and Gdynia has risen by close to 63 per cent and almost 54 per cent, respectively, while freight traffic (in thousand tons) has increased by nearly 43 per cent in Gdansk and by 37 per cent in Gdynia.
“The pandemic, unprecedented seaport congestions in China, supply chain disruptions and the war in Ukraine have all sharply accelerated the shift towards nearshoring. Many companies are deciding to shorten supply chains and to relocate manufacturing and warehousing closer to target consumer markets,” says Michał Rafałowicz, Regional Director for Pomerania, Western Pomerania and Kuyavia-Pomerania, Newmark Polska.
Jakub Dudkiewicz, Associate, Industrial and Warehouse Department, Newmark Polska, says that this is largely benefiting Central and Eastern Europe, which continues to be cost competitive with Western Europe. “Manufacturers are getting increasingly serious about relocating some production to such countries as Poland or Romania. They are willing to pay more for supply certainty and continuity. Locating even just some manufacturing in Europe is likely to significantly improve supplies to clients. The relocation of manufacturing will be supported by warehouse development,” says the expert. “Tricity is an important logistics location for both Poland and Europe. The growing importance of sea transport and freight traffic in Gdansk and Gdynia has boosted demand for industrial and warehouse space in the Pomeranian province,” adds Jakub Dudkiewicz. According to Newmark Polska, with close to 442,500 sqm of warehouse space leased across the region in the whole of 2021, take-up was 20 per cent above 2020’s total of 370,800 sqm. The leasing volume in Q1 2022 amounted to over 95,000 sqm.
Vacancy rates nearing zero
“Huge occupier demand for warehouse space pushed the region’s vacancy rate down to 1.4 per cent in Q1 2022. Vacancies are likely to soon reach their nadir point as only 11 per cent of the development pipeline is vacant and it will take at least eight months to deliver new projects,” says Michał Rafałowicz, Newmark Polska. “To assist our clients we negotiate leases for warehouse space scheduled for completion in 2023–2025. The high proportion of pre-lets, standing at close to 90%, is evidence of both robust occupier demand and subdued development activity.”
Leasing activity in the Pomeranian logistics market predominantly comes from companies relying on transport by sea. Modern warehouses in the region are also favoured by Scandinavian companies and e-commerce, which is very active in Tricity. The largest deals of the first quarter of this year in Pomerania saw a confidential tenant pre-let 30,000 sqm in Panattoni’s facility and Morska Agencja Gdynia take 22,800 sqm in Panattoni Park Tricity East V – both projects are still under construction.
“Occupier appetite remains strong but it remains to be seen how it will respond to rental growth in new build facilities in the coming months. At the end of last year, Tricity’s headline rents stood at around EUR 2.80–3.95 per sqm. The shortage and rising prices of construction materials have pushed warehouse asking rents up to EUR 3.50–5.50 per sqm,” says Michał Rafałowicz. “That being said, Poland is still one of the least expensive markets in Europe and logistics in Tricity is growing at a rapid pace.”
An extension for Tricity’s logistics market
The continued development of the Pomeranian Metropolitan Railway is another strength of the region. “Thousands of those living in nearby communes such as Kościerzyna, Kartuzy or Żukowo rely on the network to commute to Tricity every day, meeting some of the huge demand for labour,” comments Michał Rafałowicz, Newmark Polska.
This view is shared by Małgorzata Mudyna, Randstad Professionals Regional Manager, North Poland, Randstad Polska. “Regions with a dense network of urban connections such as Tricity are free from some of the barriers evident elsewhere. Private transport is not available to everyone. What’s more, rail transport and the prioritized public transport cut commute times and the younger generation increasingly value environmental care including proximity of the workplace to transport links,” says Małgorzata Mudyna, who goes on to give reasons why many choose jobs in the industrial and warehouse sector. “The industrial sector did not shed jobs during the pandemic – it offered stability and even created new job prospects. As a result, it is perceived as an attractive and reliable workplace. It has attracted many workers who previously worked in retail, catering and tourism. Another advantage is the technological development of logistics centres. Modern solutions put in place there support workers in their duties and help them hone their technical skills.”
Pomerania also greatly benefits from the pool of labour and land in the adjacent province of Kuyavia-Pomerania, which is being increasingly targeted for industrial and warehouse projects. The A1 motorway and the S7 expressway have considerably cut journey times between the two provinces.
Development activity centres on the harbour area
At the end of the first quarter of this year there was 213,600 sqm of warehouse space under construction in Tricity, with Panattoni, GLP and 7R leading the way for new development. “One of the most interesting projects underway in the region is the Pomeranian Logistics Centre, developed by GLP. It will be the largest park in Pomerania with a combined area of over half a million square metres at full build-out. Close to 200,000 sqm has already been built (38,700 sqm is scheduled for completion in the third quarter of this year). Nearly half of the new building, or 17,500 sqm, will be occupied by Langowski Logistics. In addition to its size, the Pomeranian Logistics Centre also boasts a prime location in the immediate neighbourhood of Deepwater Container Terminal Gdansk,” says Jakub Dudkiewicz, Newmark Polska. “It is a truly excellent location as it continues to attract developers, including 7R, which is planning to build 7R Park Gdansk III close to Gdansk Airport. The project is expected to provide approximately 110,000 sqm of modern logistics space.” In addition, Hines has recently secured a plot near Gdansk Kowale for a 100,000 plus sqm logistics project. Other developers are also showing a heightened interest in this region.
Contact: iwona.skalska@nmrk-global.com