International advisory firm JLL has provided a preliminary summary of Poland's office market in 2015, showing a record-breaking amount of take-up over the year.
Anna Młyniec, head of office agency and tenant representation at JLL, said: “2015 was a very good year on the office market in Poland. JLL preliminary data shows that in 2015 a total of over 700,000m² 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 m² 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 550,000m² of overall take-up”.
“Developer activity remain high. Approximately 1.3 million m² 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,” claimed Mateusz Polkowski, associate director, research and consultancy at JLL.
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%), and the highest in Poznań (19.3%). Prime headline rents in Warsaw remained stable over the course of Q3, with rents in the Warsaw city centre ranging between €21 and €23.5/m²/month and non-central locations commanding rents of €11 to €18/m²/month. Outside Warsaw, prime headline rents range between €11 to €12/m²/month in Lublin and €14 to €14.5/m²/month in Poznań and Wrocław (€13.8 – €14.5 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”, added Tomasz Czuba, head of office agency at JLL.
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 said: “By mid- December 2015, the volume of office investment transactions in Poland was €827m, with regional markets accounting for €480m and Warsaw for €347m. However, due to numerous on-going negotiations, the total volume of office sales and acquisitions can hit €1.09bn for the year, including €640m 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 finalised in Poland so far 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).
