The Polish office market had over 12.6 million m2 of A-class space at the end of Q2 2022, according to data from AXI IMMO.
Developer activity in the quarter totaled 103,900 m2, resulting from 12 completed office buildings.
During H1, 34 developments were delivered for a total area of 440,800 m2, including the Forest Tower (51,500 m2, HB Reavis, Warsaw), KTW II (39,900 m2, TDJ Estate, Katowice) and Midpoint71 (36,200 m2, Echo Investment, Wroclaw).
Two projects were completed in Q2 in Warsaw, namely SkySawa (22,800 m2) and Intraco Prime (12,800 m2), increasing the total office stock in the city to nearly 6.3 million m2.
Jakub Potocki, senior consultant, Office Agency, AXI IMMO, said: ‘We are seeing high demand in Warsaw, resulting in declining vacancy rates in central zones. Tenants at this stage are not worried about Covid. In the case of the next wave, procedures related to greater sanitary safety, such as the introduction of shift work or home office to a greater extent, will be included again. Another consequence of tenants calming down in the context of the pandemic is fewer decisions regarding space optimization. Among the industries that, from our perspective, are increasing their demand for modern office space are law firms, tax companies, the IT industry, and operators of serviced offices. The growth of the last group is particularly influenced by the increasing number of companies relocating their operations from the East, mainly from Ukraine.’
In the regional office markets, 26 developments were delivered in H1 2022 totaling 311,800 m2.
In the period April-June, ten projects were completed, including Phase I of The Park Krakow project (11,700 m2, White Star) in Krakow.
In regional cities, the largest number of projects was delivered in Krakow (about 26,300 m2), Tri-City (18,800 m2), and Lodz (18,800 m2).
The eight major office markets (Krakow, Wroclaw, Tricity, Poznan, Katowice, Lodz, Szczecin, and Lublin) account for 6.4 million m2.
At the end of June, the vacancy rate in Warsaw was 11.9% (747,700 m2), while in the regional office markets 961,000 m2 remains available for immediate lease (15,2%).
The total volume of lease transactions in the Polish office market reached 829,500 m2 in H1, of which 401,800 m2 in Q2 alone (Warsaw 212,200 m2, regions 189,600 m2).
AXI IMMO expects that rising demand and limited supply will be reflected in rising rents over the coming months.
