According to “Office Occupier: Office Market in Tricity in Q1-Q3 2020”, a report published by real estate advisory firm Cresa Poland, Tricity’s office stock reached 898,800 sqm at the end of September 2020, having expanded by 13% year-on-year, which was broadly in line with the average annual five year growth rate.
“The growth in vacancies in the third quarter, especially in newer buildings under five years of age, indicates that tenants are now less willing to commit to new leases, focusing instead on renegotiations of existing lease agreements. Several new projects are scheduled for delivery on the Tricity market in the coming quarters, which is likely to result in oversupply and muted development activity in that period,” says Michał Rafałowicz, Head for the Pomeranian Region, Cresa Poland.
“On the plus side, Tricity retains its strong position among the key locations for the business services sector, which is expected to be a driver of the office market in this region,” adds the expert.
Tricity’s total leasing volume surpassed 82,100 sqm in the year to date, which represents an 11% increase on last year’s level. New leases accounted for 45% of that total, followed by renegotiations (43%), expansions (11%), and owner-occupier deals (1%).
The largest transactions in Q1-Q3 2020 included: a new lease agreement of 12,100 sqm in Alchemia IV – Neon (confidential tenant), a lease renegotiation of 7,000 sqm by confidential tenant in Olivia Business Centre and a lease renegotiation of 6,400 sqm by Nordea in Tensor Z.
The third quarter of 2020 witnessed three office completions: Wave A (23,600 sqm, Skanska), Dyrekcja Building of the Imperial Shipyard (4,000 sqm, Stocznia Cesarska Development), and Matarnia Office Park B (2,800 sqm, PB Domesta). Total new supply in the first nine months to September 2020 amounted to 30,400 sqm – it more than doubled compared to the same period last year.
“Eight projects are currently under construction in Tricity and scheduled to deliver 100,000 sqm of office space. Tricity’s office stock is therefore expected to top one million square metres by the end of 2021,” says Iga Kraśniewska, Research Manager, Research & Advisory, Cresa Poland.
With new supply coming onto the market, the volume of unoccupied space increased by more than 30,000 sqm in Q3 2020. As a result, absorption turned negative at the end of September, amounting to -1,800 sqm, but in the year to date it totalled 16,300 sqm.
The region’s vacancy rate stood at 9.4%, up by 4.6 pp on the same period last year and up by 3,3 pp compared to where it was in Q2 2020.
Asking rents in modern office buildings in Tricity range between EUR 10/sqm/month and EUR 14,5/sqm/month (in the vicinity of Al. Grunwaldzka).
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
