Last year, developers delivered to the market over 736,000 sqm of modern office space, almost 18% less than in 2016. A new record for the office market was set by tenants who leased nearly 1.5 million sqm. Most demand came from new contracts – according to the latest Colliers International report.
The reason for this decrease in new supply was the number of completed office projects in Warsaw, where 27 projects totaling 275,000 sqm were completed. In regional cities, developers’ activity was similar to last year when 455,000 sqm were delivered to the market. The vacancy rate for office projects in the nine largest Polish markets decreased to 10.8% compared to 12.7% at the end of the Q4 2016.
Record-breaking Kraków
Most projects in cities outside the capital were completed in Kraków – 21 projects totaling 190,000 sqm. Thanks to this, Kraków was the first regional market to exceed 1 million sqm of existing office space. A development boom is being observed, which translates into over 300,000 sqm of offices in the construction phase. The tenants in the Kraków market also contributed to the record. The total volume of lease transactions in 2017 amounted to over 200,000 sqm – the highest level in the history of the market.
Good forecasts
Currently, over 1.8 million sqm of modern office space is under construction, most of which is being built in Warsaw (over 770,000 sqm), Kraków and Wrocław. Around 880,000 sqm is planned for 2018, of which the majority (70%) is in regional cities.
“We can expect that in 2018, tenants’ interest in office space in Poland will remain high. Both the capital and regional cities are attracting new companies and existing tenants are renegotiating contracts and often expanding leased space. Positive macroeconomic data and improving quality of life in Polish cities is attracting the attention of potential office tenants,” said Paweł Skałba, Senior Partner at Colliers International, Director of Office Agency.
