Office pipeline in Wrocław to remain strong – Savills

Image : Echo Investment

As much as 139,100 sqm of new office space was delivered to the Wrocław market in 2016. The result is 57 percent above the 2015 level and more than double to amount seen in 2014. The largest project completed last year was the first phase of Business Garden Wrocław (36,600 sqm), according to a recent report by real estate advisor Savills. The market is expected to hit the 1 million sqm mark in 2018.

Savills forecasts see the Wrocław market growing rapidly in the coming years: 86,200 sqm of new supply is planned for 2017, with another 86,800 sqm in the pipeline for 2018 and over 219,100 sqm of office space planned for 2019. There are 20 office projects under construction across the city with the largest being Sagittarius Business House (25,100 sqm), Retro Office House (20,700 sqm) and BZ WBK Robotnicza (17,000 sqm).

The level of demand in 2016 when 124,500 sqm was leased, was the highest in the history of the office market in Wrocław. The largest lease agreements in 2016 include a lease renewal/renegotiation of Credit Suisse in Grunwaldzki Center (10,800 sqm) and a pre-lease agreement of BNY MELLON in Sagittarius Business House (10,500 sqm).

Prime headline rents for the office space in Wrocław are now in the range of €13.00–15.00 per sqm/month and decreased slightly in comparison to the previous year. The vacancy rate in Wrocław at the end of 2016 stood at 12.5 percent, which translates into 106,300 sqm of office space ready to be leased. The vacancy rate in 2016 increased by 4.9 pp in comparison to 2015.

“A record high level of new supply we observed in 2016, with projects such as Nobilis Business House, is a response to high demand for the office space in Wrocław. We expect development activity to remain high and the position of Wrocław, as one of the key business location in Poland, to strengthen,” said Dorota Ejsmont, head of Landlord Representation, Office Agency, Savills.

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