According to surveys conducted by Colliers International among Polish companies operating on the warehouse and industrial space market*, the global pandemic caused restrictions in the operations of most entities (72%). However, many respondents, like Colliers experts, believe that the current situation may prove to be an opportunity for Poland and other European countries.  

- The pandemic affects all areas of life and economy, including the functioning of the commercial property market. Our observations show that the warehouse space market, compared to other sectors of the commercial real estate market, seems to feel the least negative effects of this difficult situation - says Dominika Jędrak, Director of Research and Consultancy Services at Colliers International.

98% of the companies surveyed by Colliers after the outbreak took precautions to protect workers' health (reduced business travel, increased security measures, remote or shift work). 

- The absence of some of the employees is one of the factors that limit the operation of companies in the industrial sector. Among other perceptible consequences of the pandemic, the respondents pointed to the suspension of production, problems with the supply of goods or difficulties at the administrative level. According to the respondents, the functioning of the business is also negatively affected by a decrease in demand for some products, closure of some or all sales channels, as well as lower customer activity - comments Agnieszka Bogucka, Analyst in the Research and Consultancy Services at Colliers International.

How will business change?

The vast majority of respondents (86%) expect that the current situation will have an impact on the logistics industry in the future. They expect the need to reorganise the existing supply chain in terms of, among other things, turning to Internet sales, reducing speculative investments and increasing the popularity of short-term contracts. Similar forecasts are also predicted by Colliers' experts.

 - We expect a decrease in the number of speculative investments, while the development of the "last mile" warehouse market may accelerate. This is directly related to the rapid growth of sales in the e-commerce sector and, consequently, the demand for warehouses closer to large cities - says Maciej Chmielewski, Senior Partner and Director of Industrial and Logistics Agency at Colliers International. 

Respondents are divided on possible scenarios related to the impact of the current situation on the demand for modern warehouse space. Nearly half of them believe that in the long run, after the pandemic stops, demand will not change. The respondents expect rents to fall slightly or remain unchanged.

Respondents are divided when it comes to possible scenarios related to the impact of the current situation on the demand for modern warehouse space. Nearly half of them believe that in the long run, after the pandemic stops, demand will not change. The respondents expect rents to fall slightly or remain unchanged.

The industrial land market

The pandemic will also affect the industrial land market. Investors are already postponing the decision to buy them. This is due to uncertainty, but also to lengthening administrative, legal and negotiating procedures. Landowners, who urgently need capital, will probably be forced to lower prices due to reduced demand. It is possible that part of the transaction will be suspended until the situation is normalised. 

- Ongoing projects seem to be unthreatened, but may be renegotiated in the long term. This situation causes us to expect stagnating prices on the industrial land market, and in the long run, a slight decrease. However, it is too early to determine how big these reductions will be and whether they will occur at all. It seems that industrial land located in the main markets, i.e. Warsaw, Silesia, Wrocław, Łódź, Poznań, should not be at risk. However, even here the decision-making processes will be prolonged - predicts Mariusz Zborowski, Associate Director in the Industrial and Logistics Agency at Colliers International.

The crisis as an opportunity

Despite the global crisis, respondents and experts from Colliers see an opportunity for development of the logistics industry. Respondents believe that the Polish and European market may gain from the Chinese, as it will cease to be perceived as the only source of imports due to the willingness to secure itself in case of potential downtime in the flow of goods. 

- Looking at the situation in terms of opportunities, we can expect a reduction in the role of the Chinese market, and thus a tendency to shorten the supply chain by locating production halls and warehouses in the domestic European markets - says Krzysztof Kienorow, Partner in the Industrial and Logistics Agency at Colliers International.

According to the vast majority of the respondents (86%), the current situation will have a positive impact on the market in the long term, also by permanently increasing the share of the e-commerce sector in the trade structure. 

- Among the positive effects on the market, we should point out the growth of the e-commerce sector, which has recorded significantly higher sales in recent weeks, even at the Christmas level. There is also a trend in which the contract logistics market, thanks to long-term contracts, is becoming a guarantee of stable revenues, as opposed to the services of the transport itself, for which demand has significantly decreased - says Jan Barbasiewicz, Partner in the Industrial and Logistics Agency at Colliers International.

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*The survey involved 50 companies, the most numerous group of which were tenants from the following sectors: trade / e-commerce (27%), manufacturing (25%) and logistics and transport (22%). 20% of the respondents were developers. More than half (58%) of the surveyed companies are large enterprises employing over 250 people. The survey was conducted from 30.03-1.04.2020.