Warsaw, 16 December 2015 – International advisory firm JLL presents the preliminary summary of 2015 on Poland's office market in Poland.
Anna Młyniec, Head of Office Agency and Tenant Representation at JLL, comments: “2015 was a very good year on the office market in Poland. JLL preliminary data shows that in 2015 a total of over 700,000 sq m will have been delivered to the market. Importantly, high developer activity has been accompanied by strong take-up. The volume of lease agreements in 2015 totalled 1.3 million sq m across Poland, which is the best ever result for the country's office market. The major cities outside Warsaw, where tenants from the business services sector have continued to dominate, accounted for over 550,000 sq m of overall take-up”.
Selected biggest lease agreements in 2015
| Tenant | City | Building | Area (sq m) |
|---|---|---|---|
| mBank | Łódź | Przystanek mBank | Ca 24 000 |
| Shell | Kraków | Dot Office | +22 000 |
| Confidential tenant | Warsaw | Warsaw Spire | Over 21 000 |
| PZU | Warsaw | Konstruktorska Business Center | 17 500 |
| State Street | Gdańsk | Alchemia | 15 000 |
Supply
Selected biggest office schemes delivered to the market in 2015
| Project | City | Area (sq m) |
|---|---|---|
| Business Garden | Poznań | 40 600 |
| Dominikański | Wrocław | 35 600 |
| Postępu 14 | Warsaw | 34 300 |
| Royal Wilanów | Warsaw | 29 800 |
| Domaniewska Office Hub | Warsaw | 27 000 |
“Developer activity remain high. Approximately 1.3 million sq m of modern office space remains under construction in Poland with Warsaw, Kraków, Wrocław and Tri-City accounting for the biggest supply volumes of space currently under development,” claims Mateusz Polkowski, Associate Director, Research and Consultancy at JLL.
Selected biggest office schemes under construction
| Project | City | Area (sq m) |
|---|---|---|
| Warsaw Spire building A | Warsaw | 59 100 |
| Business Garden (buildings III – VII) | Warsaw | 54 800 |
| Q22 | Warsaw | 48 000 |
| Gdański Business Center C (completion planned for 2015 r.) & D | Warsaw | 46 600 |
| Business Garden | Wrocław | 37 700 |
Vacancy rate and rents
Warsaw's Q3 saw a slight drop in the vacancy rate, which stood at 12.9% (16.4% in the CBD, 12.4% in the City Centre Fringe and 12.5% in Non-Central locations). Outside Warsaw, the lowest vacancy rate was recorded in Kraków (4.1%) and Łódź (7.0%), with the highest being in Poznań (19.3%). Prime headline rents in Warsaw remained stable over the course of Q3, with rents in Warsaw City Centre ranging between €21 and €23.5 / sq m / month and non-central locations commanding rents of €11-18 / sq m / month. Outside Warsaw, prime headline rents range between €11 to €12 / sq m / month in Lublin and €14 to €14.5 / sq m / month in Poznań and Wrocław (13.8 – 14.5 euro in Kraków).
“Throughout the year, we have recorded a temporary stabilization in vacancy rates. Nevertheless, due to the large supply forecast, we may expect an increase in vacancy in 2016. The downward pressure on rents noticeable in increasingly attractive packages of incentives offered by developers rather than in reductions in headlines”, adds Tomasz Czuba, Head of Office Agency at JLL.
Office investment market
In 2015, investors were the most active in the retail market followed by the office sector. A significant trend on the office investment market was the further increase in the importance of regional cities.
Sławomir Jędrzejewski, National Director, Office and Industrial Investment, JLL says: “By mid- December 2015, the volume of office investment transactions in Poland was €827 million, with regional markets accounting for €480 million and Warsaw for €347 million. However, due to numerous on-going negotiations, the total volume of office sales and acquisitions can hit €1.09 billion for the year, including €640 million in regional markets. This means that for the first time the regional office investment volume will be higher than the volume registered in Warsaw”.
The largest office investment transactions finalized so far in Poland include: B4B in Kraków (vendor – TriGranit, buyer: TPG), Empark in Warsaw (vendor – Heitman, buyer – Immofinanz) and Enterprise Park in Kraków (vendor – Avestus, buyer – Tristan Capital Group).