Voices from the market

FMS advisers

Originally Published in March 2018

Whilst certain Western European countries relentlessly repeat their slogans of owning the top European logistic hotspots, Poland has continued to forge ahead within the European warehouse market, making use of its own economic and geographical advantages. A further continuation of the robust growth trend within the warehouse sector is pretty certain.

The main drivers are: domestic consumption, which drives demand for more warehouse space from online as well as brick and mortar retailers; the recent initiative of the Polish government to change the incentive scheme to FDI related projects and numerous infrastructure projects.

But there is another element, which so far has often been overseen but could also have certain impacts on the Polish industrial real estate sector: the Chinese Belt & Road Initiative (BRI). Poland plays a key role in the so-called New Silk Road Economic Belt in being the connecting country between Asia, Russia and the CIS on one side and the EU on the other side. Estimates say that more than 80 percent of the trains currently running between China and the EU transit through Poland back and forth. This puts Poland in an excellent position. The Chinese government’s five-year-old initiative offers the Polish industrial real estate sector an opportunity to benefit from an increasing demand for distribution, supply and cross-docking operations towards and from Western Europe, which more and more international customers such as logistic operators, shippers and e-commerce companies will be looking for. So far, the majority of containerized cargo is transported by train through Poland to their final destinations e.g. in Germany or the Netherlands.

Such warehouse complexes and state of the art intermodal terminals will be obviously most suited when being established close to the main railway corridors connecting the Polish Eastern border with Germany/Western Europe as well as Scandinavian countries and Central Southern Europe.

Summarizing, Poland has a prime geographical position when it comes to the further development of the New Economic Silk Road between Asia and Europe. It is now up to international investors to seize the opportunities in Poland connected to this initiative. The Polish government as well as the regional voivodeships will have to see how to keep the prime spot whilst other countries in Central Europe are trying to attract more FDIs related to the Belt & Road Initiative.

Comment by Frank Schuhholz, Founder at FMS Advisers B.V.