Poland is the largest office market in the CEE region in terms of both supply and demand. Total office stock in Poland is estimated at over 5,5 million m2 of which 3,4 million m2 are located in Warsaw. The city has lately become a major financial hub in this part of Europe which is demonstrated by a surge in the number of international companies operating in the city and a dynamic Warsaw’s stock exchange. The Polish cities of Kraków and Wrocław amongst other are one of the most sought-after locations in Europe for the Business Process Outsourcing and Shared Services Centres, with Kraków ranked the best emerging city for BPO business in the Global Services ranking in 2010. Recent arrivals to Poland in this field include: Sony, Nycomed and IKEA.
Poland offers good quality office accommodation for reasonable price. Headline rents are between 12-15 €/ m2/ month for prime office space (excl. Warsaw City Centre where rents are 21-22 €/ m2/ month). The rents in Poland are likely to increase but will be still attractive for international occupiers looking for cost effectiveness and relocating BPO/SSC activities to Poland.
In addition, the availability of office space for potential occupiers is relatively large. Each major city in Poland is able to offer a wide choice of office space in both existing and pipeline developments.
Opportunities also lie in the industrial sector. Due to a fast improving road infrastructure, new, prime warehouse locations emerge which represent interesting possibilities for new players, who are actively researching the market.
This applies to both warehouse space developers as well as end users of the industrial space. Increased interest is also seen from production companies who look at ways to launch production in a cost-efficient European location such as Poland.
Currently Poland offers over 6,2 million m2 of modern warehouse space. The major industrial hub in Poland is Warsaw Suburbs with a total stock estimated at 1,184,000 m2.. Major competitor to Warsaw Suburbs in terms of stock is Upper Silesia, which is the most industrialised region in Poland offering convenient road infrastructure.
After stagnation observed in 2009, last year saw an increasing demand for warehouse space, which will push the vacancy rate downwards in 2011 and bring even more confidence to the market.
Warsaw’s effective rents range between €4.00-€5.00/ m2/month within the city boundaries, whilst rents in Warsaw’s suburban area are quoted at €2.00- €2.70/ m2/month. The lower band refers predominantly to such areas as Błonie which records high vacancy. Rents in Central Poland (excl. Łódź) are similar to Warsaw’s suburbs. In other regions rents range between €2.20-3.00 / m2/month in Silesia to €3.40-4.00 / m2/month in Kraków.
Retail market perspectives in Poland seem brighter than in the rest of the region with the 2010 retail sales growth at 5.5%. In the meantime, average purchasing power of Poles grew by 6.3% in 2010. Shopping centre development, albeit recorded a slowdown, is now recovering with 774,000 m2 of new retail space currently under construction.
Interestingly, above 80% of the new space will be delivered in secondary and smaller Polish cities sized 50,000 – 400,000 residents, as opposed to eight major agglomerations that feature now only five major retail constructions.
Shopping centre density in Poland is still substantially lower than in Western Europe (186 in Poland, 232 – Western Europe) which suggests a room for further development.
The retail sector in Poland, although not crisis-proof, looks to be resilient and vacancy rates in shopping centres have generally stabilized around 2%-3.5%.
Vacancy rates – Major agglomerations
The Polish market offers a wide spectrum of expansion opportunities for international retailers. Shopping centres, retail parks, outlet centres capture interest of renowned brands who have over the last several months started in Poland i.e. Lindex, New Look, Peacocks, Muji, Parfois, Accessorize, Dorothy Perkins, Carolina Herrera, G-Star Raw.