Space is running out in the warehouse market. Tenants are increasingly competing for the same facilities.

A shift is taking place in the warehouse market that isn’t reflected in the statistics alone. Although the official vacancy rate remains at around 7 percent, companies seeking space exceeding 15,000 square meters are increasingly competing for the same facilities. According to experts at SQM Advisory, there is currently a shortage not only of large, modern warehouse spaces, but problems are also beginning to affect the segment of medium-sized units, the availability of which is now at its lowest level in many years.

Just two or three years ago, a warehouse owner with available units would seek to begin negotiations with an interested tenant as soon as the tenant expressed a need for space. Today, even before talks begin, the investor can often choose from among several interested parties. In practice, this means that companies must start looking for space much earlier than before, because any delay could result in losing their preferred location.

“This is the most significant trend we’re currently seeing in the market. In recent weeks, in several leasing processes handled by SQM Advisory, we’ve had to compete with two or three other interested companies before formal negotiations even began. Until recently, such situations were the exception; today, they are becoming the norm. This affects the dynamics of the entire process and requires tenants to break from their previous habits, while advisors must be well-prepared and act efficiently,” says Tomasz Arent, Partner at SQM Advisory.

Statistics don't tell the whole story

At first glance, the situation in the warehouse sector appears stable. The problem, however, is that the market is becoming increasingly diverse. Mostly smaller units remain available. There is a shortage of warehouses with an area exceeding 15,000 square meters, which are sought after by logistics operators, retail chains, and manufacturing companies. When such facilities become available on the market, they are re-leased very quickly.

Limited availability is also influenced by the lower number of new speculative development projects. Developers are much more likely to begin construction only after securing the first lease agreements for a project, with the result that the market is slower to replenish its supply of large spaces.

Poland is no exception, but it remains competitive

The changes observed in Poland are part of a broader trend visible in the European warehouse market. In Germany, the vacancy rate for large facilities is approximately 4.7 percent, and rents for prime space exceed 9 euros per square meter per month, while in less attractive locations they are around 6 euros per square meter. In the Czech Republic, the vacancy rate stands at about 5.8 percent, while rental rates in Prague reach 8–10 euros per square meter per month, and in provincial areas they amount to about 5.5 euros per square meter.

Against this backdrop, Poland remains one of the most cost-competitive logistics markets in Europe. Base rents for modern warehouses typically range from 4 to 5 euros per square meter per month (excluding incentives that may be secured during negotiations). This sustains interest from international tenants, but at the same time increases pressure on space availability.

“Poland continues to offer a very attractive cost-to-quality ratio for its logistics infrastructure. This is one of the reasons for the persistently high demand. If the pace of new investments does not increase, competition for the largest warehouses will only intensify, and rental costs will rise,” says Tomasz Arent.

Old magazines are making a comeback

The attitude of tenants themselves is also changing. Until recently, many of them focused almost exclusively on modern developments. Today, they are increasingly considering older properties as well—properties that weren’t nearly as popular just a few years ago.

“Tenants have become much more pragmatic. If a warehouse offers the right location and technical specifications and is available practically right away, its age becomes a secondary consideration. We’re seeing a clear increase in interest in older facilities, which until recently weren’t the first choice for many companies,” concludes Tomasz Arent.

According to experts at SQM Advisory, the current situation is not a temporary result of increased demand, but rather a consequence of several overlapping factors: limited new supply, a more cautious approach by developers, and Poland’s continued appeal to investors and companies expanding their logistics operations in Europe.

SQM Advisory is a consulting firm operating in the industrial and logistics real estate market. It supports tenants, investors, and owners in making key decisions related to leasing, purchasing, and developing real estate. The SQM Advisory team consists of partners and employees with many years of market experience on both sides of the market—both on the advisory side and on the tenant, developer, and investor sides.
To date, the SQM Advisory team has participated in transactions resulting in the leasing of over 1 million square meters of space. This experience translates into recommendations based on data, market knowledge, and a practical understanding of the processes involved in leasing, renegotiation, expansion, consolidation, and relocation.