According to “Office Occupier: Office Market in Wrocław”, a report published by real estate advisory firm Cresa Poland, the leasing volume hit 128,400 sqm in 2020, up by 3.9% on the previous year’s level. It accounted for 94% of the annual average for 2015-2019. The IT sector generated the majority of office take-up in 2020 at 57%.
“Many firms are now convinced that corporate culture and personal bonding have suffered as a result of remote work and are, therefore, increasingly adopting a hybrid work model across all sectors, particularly IT, SSC and BPO. Of note is the growing importance of both workplace safety and communication technologies. Last year’s office leasing activity in Wrocław was dominated by renegotiations. Another notable trend was the growth in sublease listings driven by tenants’ focus on optimization of operating costs. Tenants expect landlords to offer flexibility that would enable them to adapt to the new market reality,” says Klaudiusz Pomykała, Head of the Wrocław Office, Cresa Poland.
2020 ended with 128,400 sqm being transacted, up by 3.9% on the previous year’s level. Last year renegotiations and new leases accounted for most of the transaction volume at 53% and 21%, respectively. Expansions made up 16% of total office take-up while owner-occupation accounted for 9%. A total of 21,800 sqm of office space was leased in Q4 alone, with renegotiations accounting for 77% of the leasing volume, followed by expansions and new leases that made up 14% and 9%, respectively.
The IT sector accounted for the majority of office take-up in 2020 at 57%, up from 15% during the previous year, representing a truly remarkable increase.
The largest transactions in 2020 included: two lease renegotiations by Nokia Solutions and Networks Sp. z o.o. of 14,400 sqm in West Link and of 14,100 sqm in West Gate, a lease renegotiation in Dominikański (building B, confidential tenant), a lease renegotiation of 10,700 sqm by DXC Technology in Renoma, and a renegotiation with expansion of 10,100 sqm in Bema Plaza by a confidential client.
Wrocław’s office stock reached 1.2 million sqm at the end of 2020, up by 3.2% year-on-year. Although no new office building was added to the market of the capital city of Lower Silesia in the three months to December, projects underway include Echo Investment’s MidPoint 71 (37,000 sqm), i2 Development’s Wielka 27 (10,300 sqm) and Tower Inwestycje’s Brama Oławska (14,100 sqm). The Wrocław office market is likely to grow further in the coming years, with a special focus on mixed-use projects such as Cavatina’s Quorum in Sikorskiego Street.
“The city’s vacancy rate stood at 15% in Q4 2020, representing a 0.7 p.p increase on the previous quarter and 2.5 p.p on the same period in 2019. Office absorption totalled 36,200 sqm during 2020, down by around 62% on the previous 12 months. In Q4 2020 alone, it climbed to 6,900 sqm,” says Iga Kraśniewska, Research Manager, Research & Advisory, Cresa Poland.
Asking rents range between EUR 10 /sqm/month outside city centre and EUR 16/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
