Łódź is building a few times more office space than the larger markets of Katowice and Poznań, what is more the structural revitalization of the city is attracting more investors
Apart from Cracow and the Tri-City, the Łódź agglomeration is currently the regional leader in terms of the planned increase in supply and expansion in the office segment in 2017.
Both executed and planned Łódź investments will create completely new public space, primarily in the area of the two largest arteries of the city – Aleja Piłsudskiego and Aleja Rydza-Śmigłego Streets, and in the area of currently the most modern railway station in Poland – Łódź Fabryczna Station and EC1 Power Station, where the project of Nowe Centrum Łodzi is being implemented.
According to Walter Herz analysts, in the mid-year, the volume of modern office space in Łódź reached almost 400 thousand sq m. In the first half of the year, about 34 thousand sq m of offices was commissioned, and by the end of the year the volume of new supply will at least double, estimate the experts. Thus, the increase in office stock will exceed the last year’s by a half (36 thousand sq m).
Record number of offices under construction
According to Walter Herz data, there are 155 thousand sq m of office space currently under construction on the Łódź market, which is a unique result, that has never been seen before. The advisors emphasize that the improvement of the city’s image, thanks to the reconstruction of the infrastructure and great human resources potential it has, as well as the location of the agglomeration only 130 km away from Warsaw, is attracting business to Łódź.
The largest new office projects are, among others, Ogrodowa Office, Przystanek mBank and Symetris Business Park. Investments based on the revitalization of the existing, often historic buildings, which are now being conducted in Łódź, are among the largest in Europe. Within the framework of the implemented program of Nowe Centrum Łodzi, the Łódź Fabryczna railway station has been rebuilt and EC1 power plant is located in its vicinity has been revitalized.
Thanks to these renovations, a modern urban space was created, which is compatible with the recently completed Nowa Fabryczna complex and the Brama Miasta project, that has been built for several months. The first building in this investment with over 27 thousand sq m of office space is expected to be ready for use in the second quarter of 2019.
Łódź with a new business and culture center
Nowe Centrum Łodzi will offer attractive and fully functional business and entertainment space, frequently visited by tourists, thanks to improved transport accessibility through the introduction of railway line and underground stations. Moreover, the city is also planning to build a tunnel that will connect Łódź Fabryczna with Kaliska and launch new fast railway connections with Wrocław, Poznań as well as Berlin, Vienna and Amsterdam.
The NCŁ will include not only office buildings, but also restaurants, cafes, retail and service points, as well as culture and entertainment facilities. The revitalization will include residential and commercial buildings, recreational, cultural and transportation infrastructure, including motorway and expressway connections, the creation of an inner bypass for the downtown area, as well as apartment construction.
Fighting to organize EXPO 2022
The use of antique buildings from the turn of the 19th and 20th century, as well as the change of the post-industrial and railway areas, will lead to the creation of a unique urban space in Łódź. The basis of the program is eight projects related to revitalization of the area from the EU funds, which will also cover the 100 ha of the downtown area, where Nowe Centrum Łodzi is being built. It is in his area where Expo 2022 fair would be held, if Łódź won the competition to organize it with Buenos Aires and Minneapolis.
The large share of post-industrial projects that have been adapted to current standards is one of the key features of Łódź office market. Further investments based on the revitalization of historical facilities are already underway or being announced.
Monopolis and OFF Piotrkowska in the historic base
One of such project is Monopolis, which is to be built in Polmos’s historic post-industrial buildings. In the complex located at the intersection Aleja Piłsudskiego and Kopcińskiego Street, will offer over 23 thousand sq m of modern office space, located in the main building of the former vodka bottling plant and two new buildings.
The facility will also include restaurants, cafes, retail points and a museum devoted to the history of Monopol Wódczany, art gallery, theater, SPA with swimming pool and a kindergarten. Launching of the investment will take place this year, and the project will be ready by 2020.
OFF Piotrkowska Center is also based on the historical buildings. In the developed complex on Piotrkowska Street, two new office buildings will be built in the industrial architecture of the former cotton factory.
The highest percentage of leased space under construction and the lowest vacancy rate in the country
Interest in office space in Łódź is enormous. The new supply is quickly absorbed by the market. Demand for office space on the Łódź market has been on an upward trend for four years. Year 2016 ended with a record volume of lease transactions of almost 68 thousand sq m of space. In the first six months of the year, the demand for offices in Łódź reached almost 30 thousand sq m, inform Walter Herz analysts.
The dominant part of the transactions are new contracts, mostly pre-let. According to experts’ analysis, most of the demand is generated by companies from the sector of modern business services. Last year, Fujitsu Technology Solutions and Ericsson signed one of the largest office space lease contracts that exceeded 5 thousand sq m.
Due to great interest from investors, since the end of last year Łódź is the city with the lowest vacancy rate in the country, which according to Walter Herz calculations is at the level of 5.9 per cent. In addition, the agglomeration has the highest percentage of leased space under construction in Poland.
Author: Walter Herz
