Stability, adaptation and potential best describe Poland’s industrial market in Q1 2025

ECONOMY: PMI finally climbs above 50 points 

According to updated estimates from Statistics Poland (GUS), Poland’s economy grew by 2.9% in 2024. This year, Poland’s GDP is expected to rise above 3%, supported by a rebound in infrastructure investment and an inflow of EU funds. Following weak growth of 0.3% in 2024, industrial production accelerated to 0.9% year-on-year in the first quarter of 2025 and to 3.8% year-on-year in March 2025 (seasonally adjusted). 

“The Purchasing Managers’ Index (PMI), which provides a snapshot of the health of the manufacturing sector, crossed the expansion threshold in February 2025 for the first time in over two years, hitting 50.6 points before edging up to 50.7 in March. This marked the end of the longest period of contraction on record, clearly indicating improving sentiment in the manufacturing sector. Meanwhile, Germany’s manufacturing industry is also showing signs of recovery, with output rising by 3.0% month-on-month in March 2025 – the strongest performance in four years. The highest growth was recorded in the automotive sector and machinery manufacturing, at 8.1% and 4.4% respectively, suggesting the start of a cyclical rebound,” explains Anita Mikusek, Senior Research Consultant, Cushman & Wakefield.

TAKE-UP: Fewer new leases as regearing activity hits a record high

“The first quarter of 2025 saw 1.1 million sqm of industrial space transacted across Poland, up by more than 16% year-on-year but down by 11% compared with the first-quarter average of 1.25 million sqm in 2020-2024. Leasing activity by transaction type showed a marked shift, with the share of renewals rising to a record high of 56%, reflecting a continuation of trends seen in 2023-2024, when regearing jumped to more than 40% of total take-up, up by 10 percentage points compared with the 2020-2022 average,” comments Adrian Semaan, Senior Research Consultant, Cushman & Wakefield.

New leases and expansions totalled nearly 490,000 sqm in the first quarter of 2025, marking a 20% year-on-year decline. This decrease, however, must be looked at in the context of relatively substantial short-term fluctuations in demand and a significant surge in leasing activity late last year, with as much as 1.06 million sqm transacted.

“While tenants have grown less willing to make quick expansion or relocation decisions due to geopolitical complexities, we are seeing an uptick in enquiries for production space and facilities dedicated to e-commerce. However, it remains to be seen whether this is part of benchmarking for preferred lease renegotiations or will also translate into stronger net take-up and new development. Much will depend on how global markets evolve. That said, Poland’s industrial market fundamentals remain robust. Key long-term growth drivers include the cost competitiveness of the Polish economy and the continued expansion of e-commerce, alongside trends towards global supply chain shortening and diversification,” explains Damian Kołata, Partner, Head of Industrial & Logistics/E-Commerce CEE, Cushman & Wakefield.

SUPPLY: Development activity hits lowest in eight years 

Nearly 680,000 sqm came on stream during the first quarter of 2025, bringing Poland’s total industrial stock to almost 35.3 million sqm. 

“At the end of March, Poland’s total development pipeline stood at approximately 1.4 million sqm, representing a 41% year-on-year decrease and the lowest volume in over seven years. In the first quarter alone, construction work began on 309,000 sqm of industrial space, with 92% of this volume under way in Mazovia and Łódzkie. Looking ahead, a potential stabilization in global trade and security, coupled with a rebound in demand and the gradual absorption of available industrial space, is likely to spur renewed development activity over the next 12 months,” adds Adrian Semaan.

Speculative construction totalled approximately 570,000 sqm, accounting for just 41% of the total development pipeline – the lowest share since the second half of 2020, i.e. during the early phase of the coronavirus pandemic, when many projects were put on hold due to heightened uncertainty. 

“Under current market conditions, both financing institutions and developers remain highly cautious about committing to new projects, with construction starts subject to increasing occupancy levels in existing facilities or securing pre-leases. New speculative construction is rare and limited to a few core submarkets with low vacancy rates, such as the south-western suburbs of the Warsaw agglomeration. Mazovia is currently the epicentre of development activity, accounting for 27% of Poland’s total industrial space under construction, followed by Silesia and Łódzkie at 20% and 18% respectively,” adds Damian Kołata.

RENTS: Effective rental rates remain under pressure 

Monthly headline rents remained flat at EUR 3.60–5.75 per sqm for big-box warehouses and EUR 4.00–8.25 per sqm for SBU/City Logistics projects. Most of the space currently available is in new developments completed in recent years and in projects in the pipeline commanding rents above EUR 4.20 per sqm. 

“In western and central Poland, where oversupply is particularly pronounced, developers are showing some more flexibility in lease rent negotiations. Additionally, with financial incentives factored in, effective rents can be 15-25% lower than headline rents,” says Adrian Semaan.

VACANCIES: Vacancy rates rise temporarily

At the end of the first quarter of 2025, Poland’s overall vacancy rate stood at 8.5%, up by 1.0 pp from the previous quarter and by 0.3 pp year-on-year. The highest vacancy rates were recorded in Lubuskie (22.9%), Świętokrzyskie (17.2%) and Lower Silesia (11.6%), while the lowest were in Podlaskie (0%), Warmia-Masuria (0%) and Opolskie (2.4%).

“Between January and March 2025, warehouse and industrial availability hit a record high of 2.99 million sqm, rising by as much as 416,000 sqm quarter-on-quarter. This growth was largely driven by new speculative supply, with 348,000 sqm remaining vacant in March 2025. Another contributor was space vacated primarily in two big-box developments in Rzepin and Sulęcin. Looking ahead, the slowdown in speculative construction is expected to keep vacancy rates in check,” concludes Adrian Semaan.