According to “Office Occupier: Office Market in Katowice in Q1-Q3 2020”, a report published by real estate advisory firm Cresa Poland, office take-up climbed to 34,000 sqm in the first three quarters of the year, accounting for 70.5% of the annual average for 2015-2019. New leases made up 70% of all deals, followed by expansions and renegotiations which accounted for 16% and 13% of the leasing volume, respectively.
“Katowice’s office market slowed significantly in Q3 2020. Projects commenced in the pre-pandemic environment continue, but construction of several buildings was shelved. There have also been some changes in decision-making processes, with some tenants increasingly deciding to remain in their current locations and to renew leases for shorter periods than the typical five-year term. I believe that Katowice – thanks to its multiple advantages – will remain an attractive location for new investors,” says Elżbieta Golik, Advisor, Office Department, Cresa Poland.
Katowice’s office stock expanded by 5.2% year-onyear to 559,500 sqm at the end September 2020. No new office building was delivered to the Katowice market in Q3 2020. The development pipeline includes large-scale projects such as .KTW II, Face2Face B, and two buildings of the Global Office Park.
BPO/SSC companies are a stable foundation of the Katowice office market. The largest office deals in Q1-Q3 2020 in Katowice included two pre-let leases in the Face2Face B office building: Capgemini (11,000 sqm) and Honeywell (3,700 sqm), and a new lease signed by Sii in .KTW I office building (3,100 sqm).
“The vacancy rate stood at 7% at the end of September, up by 0.9 pp on the previous quarter but down by 0.7 pp year-on-year. Of the eight regional cities, Katowice had the lowest vacancy rate at the end of the third quarter. Looking ahead, this market’s growth will largely depend on occupiers’ demand for new projects that are expected to deliver thousands of square meters of new office space in the coming quarters,” says Iga Kraśniewska, Research Manager, Research & Advisory, Cresa Poland.
Absorption was in the negative territory at the end of Q3 2020 and amounted to -4,900 sqm, equating to the volume of office space becoming vacant in the three months to September. In January-September 2020, total absorption hit 21,600 sqm.
Asking rents in modern office buildings in Katowice range between EUR 9/sqm/month and EUR 15/sqm/month (in the city centre).
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. To learn more, please visit: www.nmrk.pl
