In the first three months of 2022, developers gave 50 percent. more offices than in the same period a year earlier and almost three times more than in 2020. The seven largest business centers in the country gained a total of over 320 thousand. sq m new space. The number of offices under construction decreased during this period from 1.1 million to around 870,000. sq m, of which around 600,000 sq m was under construction in April in regional markets. sq m surface.
The dwindling number of offices under construction brings an increasingly limited choice of good-quality space in some cities. Warsaw is particularly exposed to supply shortages, with the fewest offices being built in over a decade. At the same time, there is a clear increase in demand on the office market - comments Mateusz Strzelecki, head of tenant representation / partner at Walter Herz.
The greater demand for offices is offset by a large amount of space delivered in regional markets outside Warsaw. Hence, the vacancy rate in leading locations in Poland remains on average at a similar level to that at the turn of the year.
There is also a significant increase in tenants' interest in flexible forms of lease, i.e. co-working spaces and serviced offices. In some locations in the country there is a shortage of vacancies in such spaces. ESG-related aspects also have an increasing impact on the office real estate market and strategies, adds Strzelecki.
The first three months of 2022 brought Warsaw slightly over 90 thousand. sq m in six completed office buildings. Completed, among others a skyscraper in the Forest investment, the third office building in the Lixa complex, the first building in SkySawa and the Fabryka PZO II office building. The capital's base now covers 6.24 million sq m. surface.
There are currently over 320,000 sq m of office space under construction in the city. sq m offices. The implementation is, inter alia, Varso Tower, The Bridge, Skyliner II and Studio Complex. Compared to the years before the pandemic, this is a large investment gap. Despite the increasing difficulties visible on the market, developers are heading towards their former activity. Last year, six zoning decisions were issued in Warsaw and seven new applications were submitted.
Due to the small number of offices under construction, coupled with the growing demand, the vacancy rate in Warsaw is falling. Supply shortages, already communicated by flexible space operators, will also affect those who rent traditional office space. However, the quality of offices offered in the capital deserves attention. Over 40 percent office space in Warsaw is certified, which places its location in the forefront. In the first three months of 2022, the demand for Warsaw offices was three times higher than the new supply, as it exceeded 270,000. sq m surface. It was the highest quarterly result in the last few years.
The largest lease transactions in Warsaw were carried out by companies from the banking and financial sectors. In regional cities, on the other hand, tenants from the technology and business services sectors have recently demonstrated the highest needs in terms of work space.
Krakow's office resources increased by 21 thousand. sq m space, which allowed to increase the potential of the city to 1.64 million sq m. offices. It was given, inter alia, Aquarius and the last building in the High5ive complex. In Wrocław, office space currently amounts to 1.28 million sq m. surface. Tricity is close to entering the group of cities with 1 million sq m. of modern office space, and the construction of any office building in Poznań has not been completed recently, which means that the existing supply has remained at the level of approx. 620 thousand. sq m
In terms of new supply, in the first months of this year. Katowice was in the lead. The construction of over 116,000 has been completed there. sq m offices. Thus, almost half of the space commissioned in that time in the regions was allocated to this agglomeration. The supply was provided, among others, by office buildings in the .KTW II project and Global Office Park, as well as DL Tower and Carbon Office. Thanks to them, office resources in the city amounted to 715 thousand. sq m, and Katowice has thus become the fifth largest office market in the country, ahead of Poznań.
In Łódź, thanks to the completion of construction works this year, almost 23 thousand. sq m offices, the supply of existing office space is 611 thousand. sq m Among the completed buildings, there are two office buildings in the Monopolis and React complexes.