Tailor Your Business in Lodz 2023

WAREHOUSE MARKET IN CENTRAL POLAND ŁÓDŹ REGION IN COMPARISON TO POLAND

2020-H1 2023 : The outbreak of the COVID-19 pandemic in 2020 and Russia’s invasion of Ukraine two years later caused significant turmoil in commercial real estate markets. Each of these two events, however, had a different impact on the industrial market. Pandemic-induced disruptions to global supply chains and restrictions on brick-and-mortar retailing were a catalyst for changes in logistics which significantly accelerated the growth of the industrial market. Strong demand came from e-commerce and tenants rethinking their strategies who began to place more and more importance on ensuring supply security. The “just-in-case” inventory management model came back into favour, with companies moving away from “just-in-time” management, which generated additional demand for buffer warehouse space. In 2021-2022, net take-up comprising new leases, pre-lets, BTS deals and expansions, exceeded 1.1 million sq m, an increase of 65% on 2019-2020. New supply for 2021-2022 hit 860,000 sq m. Despite this, the region’s vacancy rate fell from 8% at year-end 2020 to 3% at the end of 2021 before rising again to 5% in December 2022. The war in Ukraine - Europe’s largest military conflict since World War II - has caused another wave of increased economic uncertainty and a surge in inflation. Development costs have risen sharply, causing an unprecedented growth in warehouse rental rates across Poland averaging around 25%. Both leasing and development activity has, however, been gradually cooling since the second half of 2022. Although the Polish logistics market underperformed during the first half of 2023 compared to the two previous years, it is expected to maintain its positive momentum despite the economic downturn.

1,200,000 TAILOR YOUR BUSINESS IN ŁODŹ | PUBLICATION BY CUSHMAN & WAKEFIELD 1,000,000 800,000 600,000 400,000 200,000 0 sq m 2011 2012 2013 2014 2015 Source: Cushman & Wakefield

WAREHOUSE TAKE-UP IN CENTRAL POLAND

2021

2017

2018

2016

2019

2022

2020

H1 2023

Net take-up (new leases and expansions)

Renewals

TAKE-UP IN REGIONAL MARKETS JULY 2022 - JUNE 2023

Masovia Silesia Lower Silesian ŁÓDZKIE Greater Poland Pomerania West Pomerania Lesser Poland Kuyavia-Pomerania Lubusz Lubelskie Subcarpathia

0

200 000

800 000

600 000

400 000

1 200 000

1 400 000

1 000 000

New leases and expansions

Renewals

Source: Cushman & Wakefield

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