Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}
Cardiff UK Cardiff UK

Cushman & Wakefield: 2021 Outlook for Wroclaw Office Market

02/02/2021
While the Wrocław market is now showing the first signs of tenants changing their attitudes to office location, developers and landlords alike are taking action to adapt to the new reality. 

While the Wrocław market is now showing the first signs of tenants changing their attitudes to office location, developers and landlords alike are taking action to adapt to the new reality. Wrocław-based experts of global real estate services firm Cushman & Wakefield forecast that in 2021 tenants will seek flexibility in the first place, with the market likely to see a period of supply-demand stability.

2020 was a year of subletting, regearing and renewals

Despite pandemic-related challenges, leasing activity remained relatively strong on the Wrocław office market in 2020. Last year saw 128,400 sq m of office space transacted, but occupier activity by type of lease transactions reflects concerns caused by restrictions on some sectors of the national economy. Lease renewals and renegotiations that were frequently made for relatively short terms accounted for more than half of gross take-up. New leases made up around 29% of all deals, followed by expansions at just 16%.

COVID-19 has changed the way we work and some companies looking to cut costs will reduce their office footprints and sublet some space. At the end of 2020, there was 16,300 sq m of modern office space available for sublease on the Wrocław office market. Last year’s subdued occupier activity pushed the city’s vacancy rate up to 15.0% at the end of December 2020, 2.3 pp above 2019’s level.

Although asking rents hold relatively firm in Wrocław, they have come under downward pressure from tenants. At the end of 2020, rental rates stood at EUR 13–15 per sq m for class A office space and at EUR 10–13 per sq m in older office buildings. Effective rents also edged down as landlords displayed greater flexibility with regard to providing additional incentives such as rent holidays or fit-out contributions.

Time to adapt – flexibility, comfort and safety will be in demand
Looking ahead, the process of adapting office buildings to tenants’ new expectations and evolving requirements due to the COVID-19 pandemic will need to accelerate. Both developers and landlords alike will be challenged to review their leasing strategies in the new market situation, with changes likely to take place in many areas at the same time.

“Expectations are changing, among other things, with regards to ensuring employee health and comfort. Office buildings providing amenities and services that promote good health and wellbeing will definitely be favoured. Many companies will also consider adopting a hybrid office model and combining long-term leases with short-term leases of coworking spaces and remote work. As a result, offices providing both flexibility of space adaptability and an opportunity to optimize occupancy during the lease term will become sought after. Buildings offering coworking spaces operated by their landlords will also be winners,” says Marcin Siewierski, Regional Head, Cushman & Wakefield Poland.

Balance between remote and in-office work is wanted

COVID-19 has presented a range of new challenges for the office sector. Will 2021, therefore, witness a sharp fall in office occupancy?
“Not necessarily so. Cushman & Wakefield’s research and survey insights gleaned from office workers around the globe show that a majority of us do not dream of exclusively remote structures, and organisations will need to strike the right balance between remote and in-office work. According to the firm’s Polish report ‘Gen Z – A Workplace of the Leaders of the Future’, 61% of survey respondents would opt for combining in-office work and working remotely. Full-time remote work is favoured by only 13%. And according to Cushman & Wakefield’s global report ‘The Future of Workplace’, 70% of the younger generation report challenges in working from home,” says Marcin Siewierski.
Investors appear to hold similar views on the growth of the post-pandemic office market. Developers and investors alike remain relatively active in the Wrocław office sector.

Stability is on the cards for the Wrocław office market in 2021

“Only 57,000 sq m of office space was added to the Wrocław office market last year, nearly three times less than the amount of office completions in 2019. A similar volume is expected in 2021. On the other hand, this will result in stability between demand and supply, as well as steady absorption of vacant office space. This demonstrates maturity of the Wrocław office market. The city is no longer seen an ‘emerging market’, but a mature and well-established business location that boasts a diverse offer and an ability to respond to the market situation flexibly and swiftly,” comments Marcin Siewierski.

 

Media Contact

 Eliza Bingul
Eliza Bingul

Head of Digital & Corporate Communications CEE • Warsaw

Recent News

insights

Marketbeat Office Regiony 2019
MarketBeat • Office

Cushman & Wakefield summarises Poland’s regional city office markets

At the end of 2019, the combined office stock of Poland’s regional city office markets climbed to 5.61 million sq m, surpassing Warsaw’s 5.59 million sq m for the first time in history. The total office stock of the nation’s nine largest markets (Warsaw, Krakow, Wrocław, Tricity, the Upper Silesian and Zagłębie Metropolis, Poznań, Łódź, Lublin, and Szczecin) came close to 11.2 million sq m at the end of last year, representing an almost 8% increase on 2018’s level.

09/03/2020
Marketbeat Retail
MarketBeat • Retail

Cushman & Wakefield: a summary of the Polish retail market in 2019

Global real estate services firm Cushman & Wakefield has summarized the Polish retail market. 406,000 sq m of retail space was handed over in 2019. The development pipeline currently stands at approximately 500,000 sq m, 85% of which is scheduled for opening by the end of 2020. Going forward, investors’ interest will increasingly shift towards smaller cities below 100,000 inhabitants, says Cushman & Wakefield.

09/03/2020
Coliving
Insights • Coworking

Role of the sharing economy in the Polish economy. Cushman & Wakefield presents its latest report “Co-living – a new era for the real estate investment market in Poland”

Co-living is making inroads into the Polish real estate market. It is a trend where residents share living space and a set of interests and values in line with their financial capabilities - it has already gained traction in the United States and Western Europe, but is just beginning to emerge in Poland, thereby offering a huge growth potential.
Mira Kantor-Pikus • 03/03/2020

CAN'T FIND WHAT YOU'RE LOOKING FOR?

Get in touch with one of our professionals.
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Cookies.

MORE OPTIONS
Agree and Close
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS