One criticism commonly levelled at the Polish logistics market when compared with other western European countries is the assumption that an excessive land supply exists. Investors currently believe this could be built out in an uncontrolled manner and, combined with a normalisation in occupier demand, could see vacancy rates spike and subsequently impact rental growth.

When looking at development ready land, Savills research shows that the UK has a land supply that can accommodate up to 20.6 million sq m of warehouse space. In comparison, Poland has just 16 million sq m, suggesting that for a market of its size, Poland does not have excessive land supply compared to other mature markets.

Kevin Mofid, head of EMEA industrial & logistics research at Savills, comments: “This common misconception has historically painted Poland in a negative light when it comes to industrial & logistics investment strategies. However, the country actually strikes the perfect balance between speed to market from a build-to-suit perspective and underlying location fundamentals. What’s more, Poland’s attractive policy incentives, lower labour costs and business-friendly environment make it an ideal destination for multinational corporations looking to nearshore operations and improve supply chain resilience.”

Savills notes that Poland is now the fourth largest logistics market on the continent, with only Germany, the Netherlands and the UK transacting more warehouse space since 2012.

Positioned between western Europe’s developed markets and eastern Europe’s emerging economies, Poland offers a compelling investment opportunity due to its strategic location, robust economic growth and favourable business environment. This has been boosted by substantial EU development funds, with the country due to receive more than €76 billion between 2021 and 2027.

Poland is already a key distribution and fulfilment location for a number of global e-commerce platforms, including Amazon, Zalando and Shein, servicing western Europe and Scandinavia. However, Savills notes that the country is poised for significant e-commerce expansion, with retail penetration forecast to grow from 13.1% to 16.6% by 2029, in line with strong domestic growth forecasts. This means Poland will continue to benefit from increased demand for warehouse space from occupiers looking to bolster their cross border deliveries.

The Baltic Sea coastline also hosts several pivotal ports, with Gdansk handling over 79.6 million tonnes of cargo in 2023, an increase of 26.1% on 2022. This has already boosted the Tricity’s (the cities of Gdansk, Gdynia, and Sopot) logistics market from an occupier perspective. New infrastructure improvements in the Tricity region will also further increase efficiencies.

George Coleman, EMEA industrial & logistics, continues: “Savills recent European Logistics Census highlighted that 30% of manufacturers and 27% of retailers have plans to diversify their supply chains. In fact, there are already a number of examples of companies selecting Poland as a nearshoring location, suggesting that the country has significant potential to grow its reputation as the European hub for the silk road economic belt. ESG is also noted as a ‘gamechanger’ and as such, we expect best in class stock to outperform secondary stock in the Polish market.”

This, coupled with other strong market fundamentals, makes it an attractive proposition for investors. Poland is already outpacing many western European economies, with take-up totalling 3.37 million sq m in 2023. Although this is a fall of 25% year-on-year, this remains in line with the rest of Europe. Despite this reduction, Savills figures show that take-up was 31% higher than its pre-pandemic average in 2023.

Across Europe, Poland has maintained its share at c.12% of the market, even as it’s slowed over recent years. In contrast, the three largest markets, Germany, the Netherlands and the UK have all fallen by 3%, 3% and 2% respectively. Savills believes this will put Poland in good stead to grow its overall share in the next decade.

Its attractiveness is also evident in the significant uptick in Foreign Direct Investment (FDI) since the pandemic. Poland has seen FDI inflows averaging 3.8% of GDP over the past three years, outpacing Spain and dwarfing the EU’s overall 0.2%.

Andrew Blennerhassett, associate in the research team at Savills, adds: “With 35% of existing stock having been delivered in the past three years, the quality of units is high compared to more mature markets, especially when it comes to ESG. This, again, makes Poland attractive to international operators who are increasingly prioritising sustainability. Prime rents also remain relatively low and have not reached the higher levels seen in other European markets. Therefore, with strong market fundamentals and increasing barriers to entry for developers we expect to see rental growth as the next market cycle takes shape.”