The companies have returned to talks regarding the extension and renegotiation of contracts
The demand for office space in Wrocław is generated primarily by companies from the business services sector. It is one of the industries that is growing the fastest and is doing well in the current reality. This gives Wrocław office market a chance for further, regular development. Wrocław was the first to specialize in a specific field. It brings together companies that provide broadly understood business services, where technological and IT centers are developing particularly strongly.
Dedicated investments
An example of office investment dedicated to the sector in Wrocław, may be the construction of Nowa Strzegomska building with 10 thousand sq m. in Wrocław Business Park, which will be occupied by the IT company GlobalLogic S.A. Approximately 1,000 people will work for the company.
In addition, investors in the capital of Lower Silesia are strongly supported by local government units. They also use the impressive foundation of well-qualified staff, educated in fields dedicated to the outsourcing sector. Such foundations give the city stability and security when it comes to business development and thus the growth of the office market.
-Wrocław office market has been in an economic freeze, since mid-March 2020, but its development prospects are based on solid foundations. An obstacle in the development of investments is, as in all agglomerations in the country, prolonged administrative processes, staff shortages and incomplete continuity of supply, but the construction of office buildings in the city has not stopped. The implementation of projects is consistently continued, and a lot of office buildings are currently under construction, with a total of almost 220 thousand sq m. of space in Wrocław – says Mateusz Strzelecki, Partner / Head of Regional Markets at Walter Herz.
First quarter with high rental volume
– Just like anywhere else, tenants in Wrocław, first decided to wait it out, monitoring closely the development of events. However, we are observing a renewed recovery in the office market. The companies returned to talks regarding the relocation and renegotiation of contracts. What is more, lockdown did not prevent finalization of contracts that were signed during this unusual period. Wrocław tenants are aware that ‘home office’ is not able to fully replace effective work in the office, which guarantees business development – admits Martyna Markiewicz, Senior Leading Negotiator at Walter Herz. – In the first three months of this year, demand in Wrocław remained at a very high level. The transaction volume reached 48 thousand sq m. of space and was twice as high as in the corresponding period of 2019. The next quarter will certainly bring many changes, new trends and expectations from tenants. However, the most important thing is that we are returning to action, both in the office market and in the investment field – says Martyna Markiewicz.
According to Walter Herz calculations, Wrocław office resources have already reached almost 1.2 million sq m. of space. In the first quarter of this year, only one building with 8.2 thousand sq m. was commissioned, but developers are conducting projects, the planned completion of which may bring almost 60 thousand sq m. of offices this year. Among them is another building in City Forum investment and an office building in Centrum Południe project.
Construction is going as planned
Nevertheless, even if all the investments are completed on time, the new supply will be half as big as in the record-breaking 2019, when nearly 150 thousand sq m. of office space entered the Wrocław market, including Business Garden Wrocław II with 79 thousand sq m. of offices. Last year was the second in a row in which Wrocław’s office resources grew at such a record pace.
At the same time, it should be noted that the facilities commissioned over the last two years were mainly concentrated in the western part of the city, and the investments currently underway are focused primarily in the center and southern part of the agglomeration. MidPoint71 building by Echo Development company on the centrally located Powstańców Śląskich street, and Wielka 27 office building by i2 Development company are currently under consgtruction.
