Łódź is becoming more and more important player in the office real estate market. Its characteristic is the steady rise of the demand and supply of office spaces. According to the data of Jones Lang LaSalle company, in 2012 there was a lease of 27,000 m2 of the modern office space. The biggest transactions were for example the lease of 2,700 m2 in Park Biznesu Teofilów I by Polkomtel, 2,125 m2 in Sterlinga Business Center by BRE Bank and 2,100 m2 in Green Horizon by SWS BPO Poland.
The investors seem to confirm the interest in Łódź’s office spaces. One of the examples can be Real Office office building, located on Traktorowa 126 street. The object was finished in 2011. The investment is by now almost fully commercialised. We managed to sell or rent 8 out of the 9 storeys in the last two years, which is the time we finished the construction. Now we are completing and dividing the last free storey into smaller spaces. From our experience we can assume that we will have it commercialised before it will be finished – says Agnieszka Wróbel, Head of the Marketing and Sales Department in REAL Development Group sp. z o.o. sp.k., the project’s investor.
The supply side
Thanks to the large interest of the tenants, office real estate market in Łódź has developed quickly in years 2005-2010. According to Jones Lang LaSalle analysts, the average annual volume in these years was 30,000 m2 of the space ready for use.
It is important to note that the current supply of 250,000 m2 is two times less than the one in Cracow, a city with similar number of citizens. It means that in Łódź there is still a potential for a rise.
In 2012 the first phase of Green Horizon project, which enriched the market for 16,500 m2, was ready for use. Now another 45,100 m2 are being constructed and they can be finished this year.
According to Jones Lang LaSalle experts, the demand in 2013 will be on similar level as the one from 2012. The analysts note that waiting for new tenants, especially from business sector, there are 5 options of lease more than 1000 m2 in buildings already existing, or 3 options in the ones being constructed, which are to be finished this year. According to JLLS’s data, tenants can choose from 34,100 m2 in finished investments and 38,000 in ones being constructed.
The development of Łódź’s office real estate market is mainly due to companies from the modern business services sector, which take up about 80,000 m2 of space, 2012 was a critical year, in which such giant companies as HP and Samsung decided to open their centres in the city. It is worth mentioning that the demand comes not only from new investors, but also from the companies already working in Łódź – for example Mobica – which due to the expanding of the activity are looking for places which are better from the point of view of technical standard of development possibilities. Łódź’s office real estate market is growing in response to demands of such organisations. We also should not forget the companies, which do not change the localisation of their centres, but are looking for new space according to their development and the rise in employment – a classic example is Infosys – comments Jakub Sylwestrowicz, Head of Tenant Representation Associate Director in Jones Lang LaSalle.
What do the tenants need?
For the tenants and clients, a very important factor is the access to parking spaces, and we have a big space in front of the building. We observe a trend of moving to the city centre, caused by difficulties with finding a parking space – notes Agnieszka Wróbel. Other important factors are location and price. Łódź is especially attractive when it comes to the last one. According to JLLS, the average monthly rent is 11 to 13 Euro/m2. Agnieszka Wróbel draws attention to the fact that rents can be very attractive. In our opinion, Real Office building is so popular due to its high standard and an attractive price. It is also distinguished by the low operating costs. The reason for that is the building not belonging to one owner, but to multiple ones (like in housing). All of the coproprietors want the costs to be low, so the administrator is running the building in the most economical way – says Head of the Marketing and Sales Department in REAL Development Group sp. z o.o. sp.k..