Where is the promised land?

The greatest number
of modern warehouses are located in the Greater Warsaw area, i.e. within a 70 km radius from the capital. Investors, developers and agents still consider the Mazowsze region (which includes Warsaw) to be the best area to invest in. Why is this the case? What makes a particular region more attractive than another? We tried to answer all these questions in a survey we prepared on the most popular warehouse locations
in Poland.

Firstly (secondly and  thirdly)
What makes a particular location attractive for warehouse developers? Interestingly, the price of land is not the most important factor. In the east of the country, where arable land can be bought from USD 3 per sqm (in comparison with Warsaw where prices can reach USD 60 per sqm), modern warehouses are rarely seen. All the specialists who took part in our survey emphasised the importance of infrastructure: quality and proximity of roads and railways; telephone lines, gas, electricity and sewage systems.
In some regions of Poland - mainly in the south and in the centre of the country, where individual farms are common - it is difficult to find sites big enough to build warehouses on. On the other hand, bigger areas often belong to companies whose financial and legal status is not clear thus they are not attractive business partners.
Other important factors to consider when looking at the viability of a potential warehouse site include the availability of human resources and labour costs. ,When we attempt to value a site for future investment, from a technical point of view, only numbers are important i.e. the cost of the land, the cost of construction and agency costs," says Roman Fortuna, property expert at CB Richard Ellis. These factors occur in varying degrees in different regions of the country.

Warsaw remains popular
There is some 720,000 sqm of modern warehouse space in and around Warsaw. Analysts estimate that by the end of the year a further 25,000sqm of new warehouses will be added, mainly around the Okęcie Airport area and the southern part of the city. Why is the capital so popular with warehouse developers? Some reasons are obvious. ,It is an ideal place for investments because it is the biggest market in Poland and the likelihood of leasing space quickly is great," say Marta Wisniewska and Grzegorz Luboiński from agents Maxon Nieruchomosci.
,As Warsaw has the greatest number of international companies operating in it than any other Polish city, and the Mazowsze region has the largest number of logistics centres, a lot of goods are transported from this base to other parts of the country," says King Sturge's Marzena Pobojewska.
Michał Czarnecki from developer Apollo-Rida adds, ,The qualified work force in Warsaw as well as the amount of potential business partners, make it an attractive location."
,Despite the fact that land here is the most expensive, it is easy to find warehouse tenants," notes Anna Witecka from ProLogis.

Warsaw is Poland
John Palmer from CB Richard Ellis agrees with the above points but adds that there is another reason as to the popularity of the Warsaw area. ,Some of the warehouse facilities originated around the capital to serve the market, that's obvious. But, a few years ago investors were choosing Warsaw because it was a city they had heard of. Other parts of Poland were not widely known outside the country. It's difficult to invest millions of dollars in a place you didn't even know existed," says John Palmer.

Increasing activity in
southern Poland
Has investors knowledge of our country now deepened, will investors 'wake up' to the potential of other regions? Yes according to our survey. The majority of those questioned pointed to the Silesia region (southern Poland) and Łódź (central Poland) as places where increased warehouse activity can be expected. Silesia has a higher population than Mazowsze, and it's infrastructure is reportedly better than that of Warsaw.
,In my opinion infrastructure depends on the site in question, not the region," comments Tomasz Olszewski  from Cushman & Wakefield H&B.
,An additional advantage," say Maxon, ,is that there is little supply of modern warehouse space in this region."
Supply, however, will increase. Waypoint Investment Group is to develop the Cross Point Distribution Center in Żory, Śląsk. The first phase of the project, estimated to cost   USD 5-7 mln, will see some 20,000 sqm of warehouses being built. Once completed this distribution centre is to offer a total of 120,000 sqm of modern warehouse space. Bielsko-Biała, Śląsk, will also see increased warehouse activity with the construction of a complex being built for one of the big retail chains operating in Poland.

Central locations
Apart from the Silesia region, both Łódź and Piotrków Trybunalski, central Polish cities, featured positively in our survey. ,I think this is the best location for warehouse and light production facilities," says AIG/Lincoln's Bartosz Szewczyk. ,Logistics' companies can benefit from the large and cheap labour force available here."
,In my opinion Łódź and the nearby Stryków are growing in importance due to their good positioning, Łódź's large population, and the fact that they are near a planned major motorway junction. Their attractiveness in enhanced by the fact that land and labour is cheap," says Maxon's Grzegorz Luboiński.
Analysts from CB Richard Ellis agree that the number of warehouse developments in the Łódź area is likely to increase. Szybka Paczka has been operating a sorting plant in Stryków since November last year. Raben Łódź, part of the logistics' company Raben Group, is to open a 6,000 sqm facility in Stryków this autumn. Raben Group also reports it is planning to build 2 more large warehouses in the area. We should also mention IKEA who built its 100,000 sqm distribution centre (to be extended to 163,000 sqm) serving it's Central Europe operations in Jarosty, near Piotrków Trybunalski.

Changes afoot in the west
Regions in western Poland rank next in our survey, especially the areas around Wrocław and Poznań. The Wrocław Integrated Logistics Centre, located near Wrocław, is to get underway this summer. This PLN 500 mln scheme is to comprise 80,000 sqm of closed warehouse space, 100,000 sqm of open warehouse space and a 150,000 sqm container terminal on a 38 hectare site. This area is good for such projects as 3 of the planned motorways are to be built here (A3, A4, A8).
The situation is similar in the Wielkopolska region, western Poland. According to Marzena Pobojewska from King Sturge, the region has the most potential investments in Poland, comparable only to Warsaw and Silesia."There are many companies with foreign capital there, which also facilitates investment."
ProLogis agree. They are currently expanding their ProLogis Poznań Park with new warehouse facilities for Coca-Cola as well as adding a further 20,000 sqm of speculating space to the complex.
Third division
What about the other regions? Aren't the ports of Szczecin and the Tri-City enticing to warehouse developers? According to those surveyed, they're not. The consensus is that they are important areas of the country but 'closed' by the sea. ,No matter how attractive the price of land is and how accessible it is, no distribution park will be built there," says Anna Wirecka from ProLogis. Maxon's Grzegorz Luboiński thinks that other warehouse locations (not mentioned above) cater to specific niche markets.

Future development for the east
There is no modern warehouses space in the eastern Regions of the country. Professor Stefan Abt from the Poznań Economic Academy thinks that 2 logistic centres should be built around the towns of Siedlce and Rzeszów. These, however, would only be small scale developments as the amount of goods flowing through the area is still too small to make such an investment profitable.

Location - of secondary
importance
,All the above mentioned criteria (price, infrastructure, investment climate, etc. - note by Eurobuild) are of secondary importance to developers. The most important factor to consider is the client and his demands," believes ProLogis' Anna Witecka.