In analyzing this issue, we will try to provide some arguments to subjectively assess the situation we are facing.

Via Carpathia

An indispensable element in the development of any region is infrastructure. On May 21, another section of the S19 Via Carpatia expressway was opened, connecting Rzeszow and Lublin. The drive between the two cities was shortened to about 90 minutes. The Via Carpatia route is a European route that aims to connect the north with the south of the continent. It is an extremely important route of international importance, which in Poland will be more than 700 kilometers long. The road will run through Podlaskie, Mazowieckie, Lubelskie and Podkarpackie provinces. Via Carpatia will connect Lithuania, Poland, Slovakia, Hungary, Romania, Bulgaria and Greece. There is no doubt that the newly opened section as well as the completion of the entire Via Carpatia route will revitalize both local markets and the entire eastern part of Our country.

The newly emerging infrastructure will open up new opportunities for the development of hitherto unpromising areas. We are talking about new land for investment and the use of labor from the provinces, Podkarpackie and Lubelskie. A big advantage of the attractiveness of these provinces is the availability of a large number of workers, for many years maintaining almost the highest unemployment rate in our country (exceeding 8% in some periods). In addition, more than 2 million Ukrainian citizens have arrived in our country in recent months, having largely settled in the eastern part of Poland and are now looking for stable work. This will certainly be an additional driving force for these regions.

Forecasts, opportunities and threats.

Both factors described above are driving greater investor interest in areas previously considered less attractive. Forecasts for 2022 predicted that within a few months developers would deliver more than 4 million sqm of warehouse space in our country, accounting for as much as 18% of the current stock. Invariably, the stock of logistics space in Poland has been growing by more than 10% per year since 2014, with the average for the last five years around 15%. This means that we are the fastest growing warehouse market in Europe! At the end of 2021, Poland’s warehouse space stock will reach 23.7 million sqm. However, the forecasts presented here may not be fulfilled mainly due to a sharp increase in construction costs, high inflation that has persisted for several months, a spike in interest rates and a reduction in interest from global investors worried about the transfer of the conflict in Ukraine to our country as well. However, in a situation where we remain economically stable and there is no armed conflict on Polish soil, an important argument affecting the development of the “eastern wall” will be the need to rebuild Ukraine’s ruined infrastructure after the end of the ongoing war there. It seems natural that it is Poland, as a neighbor with good relations with Ukraine, that will have a significant impact on quickly getting that country’s economy back on its feet. Here we can only forecast how significant properly located production facilities, warehouses with availability of large quantities of needed raw materials, production facilities and construction materials will be in fulfilling this task.

An additional asset that can drive the development of the eastern areas of Our Country is the highest permissible thresholds of regional public aid in Poland and the entire European Union. In the four provinces of Eastern Poland, the available amount of regional public aid for large entrepreneurs, calculated as a percentage of eligible costs (investment expenditures in the case of logistics and manufacturing companies) is as high as 50%. For medium-sized companies, the intensity of state aid increases by 10 p.p., for small and micro enterprises it is 20 p.p. higher.

Non-refundable cash grants and tax exemptions are the main advantages of the program, but in addition, as part of the Polish Investment Zone, companies can take advantage of CIT income tax exemption. Both the period of the tax exemption (it can be used for 15 years) and its amount are the highest in the Podkarpackie, Lubelskie, Podlaskie and Warmińsko-Mazurskie voivodeships.

All the presented assets, opportunities and threats allow to at least partially answer the question: is it worth investing on the “eastern wall”? In our opinion, this is the most promising area for the warehouse-industrial sector given the still relatively low saturation of space