New office supply in Poland exceeds 0.5 million sqm in Q1-Q3 2020

According to data from AXI IMMO, developers delivered over 530,000 sqm of office space in Poland in Q1-Q3 2020, of which 305,000 sqm belonged to eight major regional markets (Kraków, Wrocław, Tricity, Poznań, Łódź, Katowice, Lublin and Szczecin), while in Warsaw at that time 231,600 sqm was delivered for use.

In the structure of the new supply in the period from July to September, this year, most of the modern office space was delivered in Warsaw. Companies delivered six projects to this market (131,500 sqm), the largest of which was The Warsaw Hub complex (Ghelamco, 89,000 sqm), the building of the Office Near Warzelnia (Echo Investment, 24,000 sqm) and The Park 7 (White Star RE, 10,000 sqm). 

Work on new investments (129,500 sqm) was completed on four out of eight analyzed markets. Most of the space was delivered in Wrocław (48,900 sqm), Kraków (38,200 sqm), Tri-city (30,400 sqm), and Łódź (12,000 sqm). 

Due to the new supply, at the end of Q3 2020, the total stock of office space in Poland amounts to approx. 11.5 million sqm. Warsaw remains the leader (5.82 million sqm) ahead of regional markets (approx.5.7 million sqm), among which traditionally the largest amount of space is in Kraków (1.52 million sqm), Wrocław (1.23 million sqm), and the Tri-City (898,800 sqm).

"In line with our earlier forecasts, the office market is undergoing a number of changes as a result of the Covid-19 pandemic - both in terms of demand and supply and, above all, their type. Decisions on possible expansion or relocation plans are postponed. Secondly, in all markets, we are observing a growing offer of space for rent on a sublet basis. At the end of Q2 2020, we indicated that the availability of this type of offer in Warsaw accounted for about 1 percent of its total space resources, and today it is already about 1.5 percent. Thirdly, some companies now consider flexible forms of lease much more favorably as a temporary option. Fourth, until the situation calms down. on the market, we expect that most of the new projects planned for the coming years will be suspended until at least 70 percent of currently available investments to be commercialized,” Martin Lipiński, director of the Office Agency and Tenant Representation Department at AXI IMMO, pointed out.

At the end of September this year. in Poland, the volume of immediate office space amounted to 1.24 million sqm  (10.7 percent). The largest amount of space for rent is immediately available in Warsaw (559,200 sqm), Kraków (188,800 sqm), Wrocław (176,500 sqm), and Tricity (84,700 sqm). The total available space in the regions at the end of the third quarter was 679,600 sqm and increased by approx. 108,000 sqm only in the last three months.

(ISBnews)