Warehouse market in Kraków
27.10.2011
Poland’s location between the highly developed Western European countries and Eastern Europe provides the possibility for direct and easy access to some 500 million people in Western Europe and 250 million in Eastern Europe. The air, road, railway and sea connections with all major European capital cities make Poland an integral part of the Trans European Network (TEN).
Development of modern warehouse stock in Kraków has benefited from the city’s location at the one of major highways in Poland for several years. Nevertheless, it has been still one of the youngest warehouse markets in Poland and remains one of the smallest ones, albeit with great potential.
At the end of 2010 modern warehouse stock for rent (i.e. excluding owner-occupied stock) in Kraków was estimated at approximately 65,700 sq m (approx. 1% of the Polish industrial market). The figure has remained unchanged since the end of 2009 when the Panattoni Park Kraków project was completed. Nevertheless, low developer activity has been a countrywide trend and a consequence of both the relatively high volume of vacant space available in completed buildings and an echo of the global economic turbulence of 2008/2009. Weaker absorption observed at the end of 2009 and banks’ severe requirements concerning pre-let agreements in the process of obtaining project financing discouraged warehouse developers from starting construction in 2009/2010.
The total stock is expected to increase in the first half of 2011 upon completion of the first stage (some 14,000 sq m) of the largest warehouse complex to be developed in Kraków – Kraków Airport Logistic Centre (total warehouse space of some 150,000 sq m) being developed by Goodman, and 4 buildings within MARR Business Park (over 12,000 sq m of warehouse space).
Land secured by warehouse developers in Kraków and its surroundings may allow a further approximately 300,000 sq m of space to be delivered. This amount of potential development proves that the area remains attractive for potential investors who, to start a construction, wait for the market situation to improve and for banks to loosen their restrictions on raising finance.
The article from Real Estate in Małopolska. The report prepared for Małopolska Regional Development Agency S.A. by Prof. Dr hab. Adam Nalepka, dr Agnieszka Makowska, dr Bartłomiej Marona, mgr inż. Agnieszka Telega, Uniwersytet Ekonomiczny w Krakowie, Knight Frank Sp. z o.o.