Is it worth investing in Lublin? The investment environment in Lublin

Access to skilled labour

Lublin has approximately 60,000 students, accounting for close to 17.5% of its population. Its key tertiary education institutions include the University of Life Sciences, the Lublin University of Technology, the Medical University of Lublin, and Maria Curie-Skłodowska University. According to the Polish Economic Institute’s report Akademickość polskich miast (Polish University Towns), Lublin ranks fifth out of 26 Polish academic centres, just behind Warsaw, Krakow, Poznań and Wrocław. Every year the city produces approximately 15,000 graduates who enter the job market and expand the pool of skilled workers of the local economy. 

According to data from Statistics Poland (GUS), Lublin’s unemployment rate stood at 4.8% at the end of March 2023 and was lower than the national average of 5.4%. However, companies operating in the Lublin Metropolitan Area are able to reach out and tap into the workforce in Lublin and its adjoining poviats such as Świdnicki (8.2%) and Lubartowski (12.8%), which still have large pools of people ready to take up employment.

Despite the rapid growth of the city, wage pressure in the region remains relatively low. In January 2023 the average gross monthly salary in the enterprise sector in Lubelskie province was PLN 6,070 compared to the national average of PLN 6,884. This has a positive effect on business operating costs in the region. 

Lublin as an investment location

Recent years have seen an exponential growth in completions of expressways connecting the city to the rest of Poland. Key routes completed include a 171 km long section of the S17 Lublin-Warsaw expressway and a 178 km long section of the S19 road running to Rzeszów.

Work is now underway on the construction of a stretch of the S19 expressway which will connect Lublin to Białystok. Its section in Lubelskie province and its larger section in Podlaskie province are scheduled for completion in 2025. Other ongoing projects include stretches of the S17 running through Zamość to a border crossing at Hrebenne and the S12 running through Chełm to a border crossing at Dorohusk. The development pipeline also includes sections of the S12 expressway, which will connect Lublin to the ring road of Piotrków Trybunalski, making for easy transport to central Poland and bypassing Warsaw.

The extension of the expressway network will further bolster the region’s growth and encourage companies to locate business in Lubelskie. It will also facilitate the expansion of those already present there by providing easy access to other parts of the country.

Lublin Cargo Airport

Lublin Airport (LUZ) commenced operations as an international 24-hour airport in 2012. It is equipped with an advanced Category 2 instrument landing system for low visibility operations. The airport offers regular flights to such destinations as London, Eindhoven, Dublin, Oslo, Warsaw and Gdansk. In 2022 it handled approximately 330,000 passengers.

In March 2023, Port Lotniczy Lublin S.A. applied for a permit to build a cargo terminal. Construction work is expected to commence this year. The new facility, which is scheduled for completion in 2024, will feature zones dedicated to handling special cargo. It will enable local companies to ship products worldwide and will provide importers and manufacturers with flexibility to order products and items within expected timeframes. The new infrastructure will make the airport more attractive for air carriers and will further drive the region’s growth.

Warehouse sector growth in Lublin

Lublin is home to many different industries, the strongest being automotive, machinery and food processing. 

Companies operating within the Lublin Industrial Upland Cluster include ABM Greiffenberger Polska, a leading supplier of industrial electric motors; NOYEN, a manufacturer of industrial machines; and Turck, a specialist provider of automation and Industry 4.0 solutions. Lublin and the nearby town of Świdnik also serve as a base for manufacturers of hydrogen buses such as NesoBus – Polski Autobus Wodorowy and Arthur Bus, as well as PZL-Świdnik, a helicopter manufacturer.

Other leaders in their respective industries include Aliplast, one of the largest manufacturers of aluminium profile systems in Europe; Lift Service, a producer of goods and passenger lifts; and Borg Automotive, a remanufacturer of automotive spare parts. 

Key food sector companies active in the region are Lubella, a pasta manufacturer; Stock Polska, a distiller of vodka and spirits; Agram, a frozen food producer; Pszczółka, a confectionery manufacturer; and Perła Brewery.

Logistics centres have been opened in Lublin by the Dutch-based Raben Group, DPD from France, German-headquartered Schenker and the Polish company Rohlig Suus. In addition, there are also many distribution centres operated, among others, by Stokrotka, Eurocash, and online drug store eZebra.

Other industries growing in the city include the medical sector, represented by Polfa Lublin, PZ Cormay, Medisept, and BioMaxima; the printing sector with such companies as Embe Press, MM Lublin, and Intrograf, and the fashion industry with key market players being Protektor and Ledrin.

„The key competitive advantages behind the high attractiveness of Lublin as a location for warehouse and industrial projects include the rapid economic growth of the city, the continued development of low-carbon public transport, social innovations, a collaborative city management model, high-quality tertiary education institutions and further improvements to transport accessibility. The Lublin City Hall supports entrepreneurs at every stage of their project development process,” -adds Przemysław Gruba, Lublin City Hall, Department of Strategy and Entrepreneurship

Warehouse developments in Lublin

Recent years have seen a rapid increase in warehouse and industrial space availability in Lublin. Total warehouse and industrial stock in the Lublin area increased from 73,000 sq m in 2015 to 368,000 sq m in the second quarter of 2023. This growth has been driven by the growing attractiveness of leasing space for manufacturing and logistics operations. In addition to the previously discussed factors such as human capital and infrastructure availability, the city benefits also from global economic trends. Supply chain disruptions have led to a meteoric rise of nearshoring and the relocation of some production from Asia to Europe. With the war in Ukraine still waging, many global manufacturers are transferring Russia-based plants to CEE countries for geopolitical reasons while many Ukrainian companies are analysing the potential of the region as a place for doing business near the border without exposure to risks linked to the ongoing hostilities. The proximity of the Lublin region to Ukraine will also matter in the post-war rebuilding of the country, which is already on the radar of many companies. 

The stock of warehouse space in the Lublin region

In the second quarter of 2023, another 59,000 sq m of warehouse space was under construction in the Lublin area. This volume comprised 52,000 sq m in Panattoni Park Świdnik, in Nadleśna Street, and approximately 7,000 sq m in 7R Lublin, in Mełgiewska Street. A vast majority of the development pipeline has already been pre-let, but warehouse space is still available both in schemes under construction and in existing facilities. Projects which are currently in the pipeline and waiting to be launched once they are 50% pre-let are expected to provide 110,000–120,000 sq m. At the end of the first quarter of 2023, headline rents stood at EUR 3.99–4.40 per sq m. Warehouse availability was 32,000 sq m. 

„Lublin is a dynamic city with huge investment potential. Over the last decade it has gone through a significant transformation to become a major economic centre in Poland which is successfully competing with other European cities. By building a local economic ecosystem and fostering cluster initiatives, Lublin encourages start-ups, SMEs and large companies looking for new business locations to be more entrepreneurial. Such an investor-friendly environment provides plenty of opportunities for growth and success for both manufacturing industries and the business services sector. Investors also benefit from the support of the Investor Services Bureau of the Lublin City Hall throughout a project development process,” - comments Igor Niewiadomski, Investor Services Bureau.

Looking for warehouse space in lublin? Take a look at our portfolio!