No serious challengers to Warsaw office market
Office & mixed-use developmentOver 820,000 sqm of office space was leased in the capital last year, which is much more than in all the regional markets together,” reports Walter Herz. Kraków saw the second highest office demand with over 200,000 sqm leased. In Wrocław, the demand for offices came to over 170,000 sqm last year and contracts for 113,000 sqm were signed Tri-City. 78,000 sqm of office space was leased in Poznań, 59,000 sqm in Łódź and 31,000 sqm in Katowice. According to the latest Walter Herz report, the Warsaw market at the end of last year has 5.28 mln sqm of modern office stock. Over 2017, 27 buildings were delivered in Warsaw with over 275,000 sqm gla. The Mokotów region accounted for the largest share of this new space, with 72,000 sqm delivered in six office buildings . About 780,000 sqm of offices are currently under construction in Warsaw. Walter Herz claims that due to the high tenant activity in the capital, the vacancy rate decreased last year to stand at 11.6 pct at the end of 2017. Last year set a record in terms of new supply in Kraków, which increased its office stock by 193,000 sqm to a total of over 1.1 mln sqm, making it the leading regional city office market. Currently over 300,000 sqm of office space is under construction in the city. Over the same period, 54,000 sqm of new office space was delivered in Wrocław with the total stock rising to over 906,000 sqm. About 230,000 sqm of office space is currently under construction. According to Walter Herz, the Łódź office market, which is currently growing fast, deserves special attention. About 115,000 sqm is under construction in the city and over 74,000 sqm of office space was delivered last year, taking the city’s total stock to 438,000 sqm. The lowest vacancy rate (8.5 pct) is in the TriCity, where last year new supply came to 66,000 sqm. At the end of 2017, supply in this sector approached 700,000 sqm with 175,000 sqm under construction. The Poznań office market has 456,000 sqm of modern space and a further 100,000 sqm under construction. In 2017, only 26,000 sqm was completed in the city. In consequence of the low level of supply, the vacancy rate is also low at 8.6 pct. The largest deal nationwide of 2017 was a pre-lease signed in Poznań for over 25,000 sqm in Nowy Rynek, which is currently under construction. Katowice, which ranks as the fourth largest regional market in Poland, overtook Poznań in terms of total stock, despite only 17,500 sqm of new space being delivered to the market. The total office supply in Katowice came to 461,000 sqm at the end of last year with 60,000 sqm of office space still in the pipeline. Monthly rental rates in regional cities range from EUR 12 to EUR 17.5 per sqm while in Warsaw they range between EUR 11.5 to EUR 23 per sqm. You can read the full report on the Walter Herz website.
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