According to “Office Occupier: Office Market in Łódź in Q1-Q3 2020”, a report published by real estate advisory firm Cresa Poland, office take-up hit 59,700 sqm in the first three quarters of the year and was close to the annual average for 2015-2019. New leases accounted for 59% of the total transaction volume, while renegotiations and expansions made up 25% and 16%, respectively. After a good first half of the year which saw more than 51,000 sqm transacted, the transaction volume fell to 8,600 sqm in the third quarter.
The largest lease agreement in Q1-Q3 2020 was a pre-lease of 16,300 sqm in Fuzja signed by Fujitsu Technology Solutions, followed by two renewals with expansion: at University Business Park B by Barry Callebaut (6.000 sqm) and at Sterlinga Business Center (5,700 sqm, confidential tenant).
At the end of Q3 2020, Łódź’s total office stock reached close to 560,000 sqm, up by 8.2% year-on-year. The third quarter saw three new office completions with a total area of 12,000 sqm: Cross Point C (5,300 sqm, Mermaid Properties), Łódź.Work (5,200 sqm, Okam), and Słowiańska 1/9 (1,500 sqm, Real Investment).
The city’s vacancy rate continued its upward trend throughout the third quarter of 2020 and hit 14.3% at the end of September, representing a 2.2 pp increase on the same period last year.
“Łódź’s vacancy rate hit a seven-year high and was the highest among all the eight largest regional cities in Poland. Supply of new office space is expected to outstrip demand in the coming quarters,” says Iga Kraśniewska, Research Manager at Cresa Poland.
Total absorption amounted to 9,500 sqm in January-September, down by almost 65% on the same period a year ago, which was due to both the limited new supply and the rising volume of vacant space.
Asking rents stand at EUR 12-15/sqm/month in Łódź’s city centre and at EUR 10-13,5/sqm/month outside city centre.
