2013 a good year for leaseholders

Jones Lang Lasalle summarizes the office market in Poland at the end of second quarter of 2013.

According to the latest report of Jones Lang LaSalle, 2013 will be the time of creation of biggest office space in Warsaw since 2000 – as much as 336 000 sqm may be created for this purpose.

In the first quarter of the year the total stock of office space in Warsaw exceeded 4 million square meters and another 188 000 sqm will supply the market in following months. Although first six months were very good in terms of demand for new office space, due to a significant amount of finished offices, vacant office space index on the market of Polish capital has increased to 10,5 percent. However, level of vacancies in Warsaw is one of the lowest among the capitals in the East – Central Europe. It means that Warsaw’s office market is still very attractive for entrepreneurs trying to start or develop their companies.  Looking at the office market in other, significant cities in Poland one can easily notice that they’re all on different levels of development. Taking into account the existing office space, Leaseholders have a wide selection in Tricity – 56 000 sqm, Wrocław – 52 000 sqm and Poznań – 45 000 sqm, contrary to Cracow 18 000 sqm and Lublin – 6 200 sqm. We can also observe an increase in activity of property developers on the biggest markets outside Warsaw, especially in Wrocław and Cracow, were a total of 230 000 sqm of offices is about to be created – says Tomasz Czuba, head of Office Space Renting Department at Jones Lang LaSalle. 

Leaseholders’ interest is increasing

The first quarter of 2013 in Warsaw was characterized by a high demand of about 334 000 msqm, which is an increase by 12 percent in relation to the analogous period in the previous year. The biggest contract of lease in the first half of 2013 was signed by The Office for Registration of Medicinal Products which now occupies 13 000 sqm at Ochota Office Park. Another interesting contract of lease of 5400 sqm was signed by Unilever in, currently under construction, Eurocentrum Office Complex, as well as taking 4300 sq in Konstruktorska Business Center by Grupa Żywiec. Moreover, during the first half of the year, Johnson&Johnson and Royal Bank of Scotland confirmed their interest in the construction of Wiśniowy Business Park, where deals for respectively 7250 msqm and 5300 sqm were renewed.

Regional cities were interesting to leaseholders as well. During the first half of the year, gross demand in the major Polish cities, excluding Warsaw, amounted to 210 000 sqm which is 16,7 percent more than in the respective period of 2012. Leaseholders were the most active in Cracow and Wrocław. The biggest deal during the first six months was the lease of 8500 sqm in Bonarka for Business in Cracow by Lufthansa Airline Accounting Center. In the capitol of Lesser Poland another big transaction was finalized by Cisco, which has taken 7000 sqm in building C of Enterprise Park complex. In Wrocław KRUK signed a contract of lease for 7500 sqm in Wrocław Business Park 2 and 4300 sqm were taken by Credit Suisse in Green Day. There were other significant deals at that time, such as: the expansion of Infosys in Łódź which now holds 4100 msqm in the city’s Green Horizon, renewal of a contract of lease by Redknee for a spot in Wrocławski Park Biznesu 1 and a new deal signed by IBM for a place in Francuska Office Center located in Katowice.

A variety of choices

According to Jones Lang LaSalle experts, in the first half of the current year 152 000 sq of office space has been created and even as much as 336 000 sqm can be created till the new year’s eve.

In the second quarter of 2013 office space in regional cities has increased by about 47 000 sqm from which over 84 percent was created in Tricity (BPH Office Park, Oliva Business Park-Alfa and Office Building Port Gdynia) and Łódź (Green Horizon II i MediaHUB). At that period, office building Delta 44 in Wrocław and Office Center Kaskada in Lublin were put into use. Still under construction is over 512 500 sqm from which 191 200 sqm is supposed to be completed this year. Most of this space is located in Wrocław, Cracow and Poznań. Especially active was the second quarter of the year when property developers have begun a construction of 100 000 sqm of office locations, mainly in Wrocław, (43 percent), Cracow (14 percent), Tricity (12 percent) and Katowice (10 percent).

The level of vacancies in Warsaw has increased to 10,5 percent which forces property developers to lower rents. In the city center they have decreased to the level of 22 – 24 euros and in other parts to 14,5 – 14,75 for one square meter per month.  In other cities, rents are the highest in Poznań and Wrocław (around 15,5 euro) and the lowest in Lublin (11 – 12,5 euro).

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