According to “Occupier Economics: Office Market in Wrocław Q1 2020”, a report prepared by real estate advisory firm Cresa, the leasing activity hit 47,900 sqm in Q1 2020, accounting for 35% of the annual average for 2015-2019. Demand came predominantly from the IT sector (83%). Renegotiations made up 37% of all leases while owner-occupation accounted for 24% of the transaction volume.
“Wrocław’s office market remained in good health in the first quarter of 2020. However, due to the uncertainty caused by the COVID-19 pandemic, some companies have put further growth and office expansion decisions on hold and are watching events unfold. This is, however, mainly limited to industries that have been the hardest hit by the ongoing economic lockdown. Developers are also more cautious about starting new projects, with a demand-supply balance likely to be restored quickly. Pending lease negotiations have revealed that headline rents remain unchanged,” says Michał Grabikowski, Head of the Wrocław Office, Cresa Poland.
The largest transactions in Q1 included: a lease renegotiation of 10,700 sqm by DXC Technology in Renoma, and renegotiation with expansion of 10,100 sqm in Bema Plaza (confidential tenant).
Only one office building was delivered to the market of the capital of the Lower Silesian region in Q1 2020. It provides 8,250 sqm of office space for the sole occupancy of Techland.
Wrocław’s office stock expanded by more than 11% over the year to reach 1.19 million sqm. Its annual growth rate averaged 13% in 2012-2020.
In January-March 2020, absorption amounted to 13,500 sqm, representing an almost 43% decrease on the average for the previous four quarters, which witnessed a high average annual supply level.
“At the end of March 2020, the city’s vacancy rate stood at 12.1%, up by 3.6 pp year-on-year and down by 0.4 pp on the last quarter of 2019. The share of unoccupied office space in the city’s total stock is expected to remain unchanged in the coming quarters”, says Bolesław Kołodziejczyk, PhD, Head of Research & Advisory, Cresa Poland.
Asking rents range between EUR 13.5–15/sqm/month in higher grade office buildings, with lower grade buildings commanding EUR 10–12.5/sqm/month.
Cresa is the world’s largest commercial real estate advisory firm that exclusively represents occupiers and specializes in the delivery of fully integrated real estate solutions. It serves clients through more than 80 global offices. Cresa Poland offers unbiased, independent commercial real estate advice. Its integrated services include conflict-free tenant representation, capital markets, market research and advisory, valuation, design & project management and workplace strategy. Cresa Poland is headquartered in Warsaw, with regional offices in Wrocław, Tricity, Łódź and Krakow. To learn more, please visit: www.nmrk.pl
