Wrocław's office market registers excellent results for H1 2017

Advisory firm JLL summarizes H1 2017 on Wrocław's office market.

“After Kraków, Wrocław is the second largest regional market in Poland as well as the third largest market nationwide. In the first six months of 2017, demand for office space in the capital city of Lower Silesia region was nearly 92,000 sq m. Such favorable results are a consequence of the high level of activity among tenants from the business services sector. In H1 2017, they accounted for 60% of demand for office space in Wrocław. According to ABSL, the city is listed amongst the three largest locations in Poland for investors from business services sector. The 140 centres in Wrocław already employ 40,000 specialists – nearly 17% more than at the beginning of 2016. The city is also proving to be highly popular among new investors. This is illustrated by the market debuts of companies such as Epiq Systems, Mahle or TigerSpike”, comments Katarzyna Krokosińska, Associate Director, Head of Wrocław Office, JLL.

Demand

In H1 2017, the Wrocław office market recorded office take-up totalling nearly 92,000 sq m. The city’s strong position is confirmed by large lease transactions that were concluded in the first six months of 2017. The two biggest deals were signed in the Business Garden complex, in both its completed sections and those still under construction. Companies that selected Business Garden are Credit Agricole (15,500 sq m) and Capgemini (13,100 sq m). The third biggest transaction was the pre-lease agreement signed by EY for 10,500 sq m in the Sagittarius office building.

“The great interest for office space in Wrocław stems from access to excellent human resources in the city, good co-operation between investors, city officials and the academic centres as well as a sufficient supply of modern office space”, adds Katarzyna Krokosińska.

The biggest lease agreements in Wrocław in H1 2017

Source: JLL, PORF, 2017

Supply

“By the end of H1 2017, total office stock in Wrocław totalled 873,100 sq m. Regardless of the fact that 2017 will see a lower amount of new completions compared to 2016's record-breaking performance, the significant volume of space under construction (267,300 sq m) will guarantee the rapid development of the Wrocław office market. The biggest projects under construction include Business Garden (Vastint), Sagittarius Business House (Echo Investment), City Forum (Archicom) and Cu Office (Buma/Reino Partners). As for 2018, the total modern office stock in Wrocław will likely surpass 1 million sq m”, explains Łukasz Dziedzic, Consultant, Research and Consulting, JLL.

Vacancy rate and rents

By the end of H1 2017, the vacancy rate in Wrocław was 8.5%, 4pp lower than the previous year. The city's highest prime rents per one sq m per month averaged out at between €13.9 and €14.5.