Knight Frank summed up the second quarter of 2013 on the office market in Poland. It says that in the period there was insignificant supply on regional markets but tenants’ activities increased. The vacancy rate dropped in Kraków, Katowice and Poznań. Space availability increased in Wrocław, Łódź and Tricity which is related to new, commissioned projects.
According to Knight Frank data supply in Kraków at the end of June 2013 amounted to 519 400 square meters. Even though in the second quarter there were no new projects completed, it is still the biggest regional market when it comes to office space. 7 new projects appeared at the time providing in total nearly 58 000 square meters, out of which 42% will be completed until the end of this year. Tenant activity was at the level of around 29 000 square meters, out of which about 25% of transactions were pre-let. High demand and null supply in the second quarter resulted in low vacancy rate. In the second quarter in Kraków there was nearly 14 900sq.m. of space to rent available, which equaled to merely 2.9% of total resources of the office market in Kraków – the least among all regional markets. Average weighted mean of rents in the city amounts to 12.5 euro/sq.m. a month at the end of June. In the most attractive buildings the amount increases to 13-15 euro/sq.m., in class B office buildings it is 10-13 euro/sq.m.
In the second quarter of 2013 in Wrocław there was one office project (2800 sq.m.) commissioned to use, allowing total office resources to increase to the level of 438 700 sq.m. Till the end of this year the amount should exceed 460 000 square meters. At the time, lease agreements of about 23 000sq.m. were signed and sub-lease agreements of about 3000sq.m., which is an increase by 100% compared to the previous quarter. The vacancy rate reached 12.8% which equals to about 56 200 square meters of available space. Average weighted mean rental rated increased insignificantly to 13.7 euro/sq.m. a month, with class A buildings reaching 13-16 euro/sq.m., and in B class buildings 10-14 euro/sq.m.
In the second quarter the supply in Tricity increased by 21 000 square meters. It resulted in the growth of office space total volume to the level of 318 000 square meters. Currently there are severel projects under construction, altogether they will provide 49 000 square meters. Knight Frank experts noted a decline in the demand in Tricity – in the second quarter there were lease transactions of about 6600sq.m. The vacancy rate reached 17.5% which is related mainly to new competed projects. Average weighted rental rate amounted to 13.2 euro/sq.m., in the best buildings the prices varied between 13 and 15 euro/sq.m., and in class B office buildings between 7.5 and 13 euro/sq.m.
At the end of June 2013 office resources in Łódź reached about 277 000 square meters. Supply in the second quarter of the year increased by 18 000 square meters thanks to the completion of four office projects. Currently there are no new projects under construction. The vacancy rate is the highest among all regional cities and amounts to 25.4% which is 70 400 square meters of available space. In the second quarter there were lease agreements of about 9100 square meters of space. Łódź has the lowest average rental rate which amounts to 11.3 euro/sq.m. a month. Prices in class A buildings reach 10-13.5 euro/sq.m., and in B class buildings – 9-12 euro/sq.m.
Total office space resources in Poznań amount to 251 100 square meters. Since the beginning of 2013 there have been no new office projects commissioned to use. Three projects are under construction with total space amounting to 61 100 square meters, out of which 30% will be completed till the end of this year. In the second quarter there were lease agreements of about 9100 square meters, which is an increase by 34% compared to the previous quarter. The vacancy rate in Poznań dropped and at the end of June amounted to 16.9%. Average weighted rental rate amounted to 13.9 euro/sq.m. a month.
In Katowice the volume of office space reached 205 500 square meters. In the second quarter of this year there was one office project (600 sq.m.) commissioned to use. Currently there are four projects under construction which after they are completed will provide about 28 200 square meters, out of which 3600 square meters will be completed this year. Tenant activity dropped at the time – lease agreements of 8200sq.m. were signed. The vacancy rate dropped as well and indicated 7.8%. Average weighted rental rate amounted to 13.1 euro/sq.m. a month, which is an increase by 2% compared to the previous quarter.