Favourable business climate on the non-residential construction market continues

More information on this topic is presented in the PMR report:

In terms of the number of building permits in the non-residential construction sector the year 2016 saw growth both in the number of buildings and in their floor space, eventually arriving at the record figure of 22 million m². The market is driven first of all by investors who plan to construct industrial and storage facilities as well as agricultural buildings. Also the prospects of office and hotel construction are positive. To a somewhat lesser degree that applies to retail construction too.

 

According to the latest report from the research agency PMR, “Construction sector in Poland H1 2017 – Market analysis and development forecasts for 2017-2022”, in 2016 the share of non-residential construction in the construction and assembly output of all companies increased slightly, passing the 41% mark. This means that it invariably remains the largest segment of the construction market, for reasons such as the very large volume of industrial, storage and agricultural buildings as well as the large volume of renovated, modernised or extended buildings.

 

Industrial buildings drive the non-residential sector

Last year many investors, despite obtaining a building permit, refrained from starting their investment project and waited to see the further developments in the Polish economy. In 2017, in turn, probably at least some of them will choose to commence their planned projects. Therefore PMR expects that in the industrial and storage construction segment the years 2017-2019 will be a period of growth, although it will not be as robust as in the past.

Significant industrial investment projects under construction include e.g. LG Chem’s factory of electric car batteries in Biskupice Podgorne (PLN 1.3bn), FM Forte’s production plant in Suwalki (PLN 700m) and the base for the anti-missile system Aegis Ashore in Redzikowo (PLN 700m). As regards storage facilities being constructed, large projects include e.g. Zalando's distribution centre in Gardno (PLN 860m) and Amazon’s logistics centre in Kolbaskowo (PLN 410m). Significant industrial projects at the preparation stage include e.g. Daimler’s engine factory in Jawor (PLN 2bn), Xeos’s aerial engine repair and servicing centre in Sroda Slaska (PLN 1bn) as well as Egger’s production plant in Biskupiec (PLN 789m).

The contractors most active in the segment of industrial and storage facilities, in terms of the number of large contracts for projects of this type, include e.g. Skanska, Bremer, Goldbeck, Kajima, Budimex and Hochtief Polska.

Office construction with record floor space

The record volume of office space under construction, the large number of office projects in planning and the low reference base from 2016 suggest that the year 2017 will end with an increase in office construction. The market should stabilise at over PLN 4.1bn per year.

The biggest projects under construction in Warsaw now include: the complex Varso Tower (140,000 m2 of total floor space, investor: HB Reavis), The Warsaw Hub (113,000 m2; Ghelamco) as well as Mennica Legacy Tower (65,600 m2; Golub Gethouse, Mennica Polska). The largest-scale office projects in planning now include e.g. an office and retail project integrated with the train station Warszawa Gdanska (Ghelamco, PKP), Roma Tower (BBI Development; Saint Barbara’s Parish) and an office and retail building at Al. Jerozolimskie in Warsaw (PKP in cooperation with a private investor).

In 2016 the largest numbers of contracts for office buildings were won by Skanska, Budimex, Warbud, Hochtief, Porr and Erbud.

Stabilisation in the retail construction sector

In 2017, with the planned completion of several large retail facilities in Poland’s biggest cities, the value of the construction output in the segment of retail and service buildings may reach PLN 7bn for the first time in history. However, given the increasing saturation with retail space and the growing share of unused space in the existing shopping malls, the projections for the subsequent years are not as optimistic.

The biggest shopping centres under construction include: Galeria Mlociny (65,000 m2) and Galeria Polnocna (64,000 m2) in Warsaw, Wroclavia in Wroclaw (64,000 m2) and Forum Gdansk in Gdansk (62,000 m2). Preparatory works have also begun in Goraszka where the large shopping centre Kolorowe Zycie (100,000 m2) is to be constructed. Large investment projects in preparation include IKEA's store in Zabrze (68,000 m2) and Galeria Wilanow in Warsaw (61,000 m2). In terms of the number of large retail projects under construction and in planning, the Warsaw conurbation is clearly the leader now.

The companies that won large contracts for retail projects last year include Erbud (Galeria Mlociny in Warsaw) and Karmar (the shopping centre Nowa Stacja in Pruszkow). Moreover, substantial contracts in this segment are also being executed by players such as Warbud, Erbud, Unibep, RD Bud, Hochtief Polska and Mostostal Zabrze.


More information on this topic is presented in the PMR report:
Construction sector in Poland H1 2017. Market analysis and development forecasts for 2017-2022