Global real estate services firm Cushman & Wakefield summarises the Wrocław office market at year-end 2018.
Wrocław is Poland’s second largest regional city office market after Krakow. In 2018, its total office stock surpassed the one million sq m mark following a 16% increase to 1,054,200 sq m. Of last year’s 14 office completions providing a total of 146,600 sq m (+187% y/y), the largest were Echo Investment’s Sagittarius Business House (24,900 sq m), LC Corp’s Retro Office House (18,200 sq m) and BZ WBK’s BZ WBK Office Building (17,000 sq m).
According to Cushman & Wakefield’s analysts, 2018 witnessed two notable trends on the Wrocław office market. One was the record high net absorption which hit 136,300 sq m, representing a twofold increase on 2017’s level. This was driven by the robust activity of tenants who in 2017 signed pre-lets for space at office buildings completed in 2018. The other was a slight year-on-year decline in demand for office space in 2018, in which office take-up reached 162,900 sq m (-4% y/y). Unlike previous years, in 2018 tenants opted for leases at existing office buildings, which resulted in an almost fourfold decrease in pre-lets compared with the average for the last two years.
Despite several new office completions in Wrocław, prime office rents held firm in 2018 at EUR 14.50/sq m/month.
|
Building |
Tenant |
Area (sq m) |
Lease type |
|
BZ WBK Office Building |
BZ WBK |
17,000 |
Owner-occupier |
|
West Gate |
Nokia |
14,100 |
Renegotiation |
|
Business Garden Wrocław I |
Geoban Grupo Santander |
10,000 |
New deal |
|
Green Towers II |
Nokia |
10,000 |
Renegotiation |
|
Business Garden Wrocław I |
Credit Agricole Bank Polska |
9,850 |
Expansion |
|
Wojdyła Business Park II |
IBM |
8,900 |
Renegotiation |
|
Wojdyła Business Park III |
IBM |
8,900 |
Renegotiation |
|
Green Towers I |
Nokia |
6,150 |
Renegotiation |
|
Retro Office House |
Olympus |
5,700 |
New deal |
|
Green Towers I |
3M |
5,350 |
New deal |
“Wrocław continues to attract global SSC firms and local technology companies. The city beckons the business services sector with world-class professionals, a high-skilled and efficient labour pool, and moderate employment costs. The Wrocław office market more than doubled in the last five years and is expected to expand by another 30% in the next two years. After a relatively subdued developer activity in 2017, new supply climbed to nearly 150,000 sq m in the last 12 months. Despite this substantial increase, the city’s vacancy rate remained relatively unchanged since 2017, largely due to the absorption of office space delivered to the market in 2018 and previously contracted under pre-lets in 2017,” says Marcin Siewierski, Associate, Office Agency, Cushman & Wakefield.
