In Q1 2018, the supply of modern office space in Wrocław amounted to approximately 875,000 sq m of rentable space and 67,000 sq m of owner-occupied accommodation, which gives a total of 942,000 sq m.
Wrocław is the second largest regional office market in Poland after Kraków in terms of the total office stock. Approximately 21% of the existing office supply is situated in the core city centre and 28% is located in subcentral areas. The remaining stock is located in non-central areas, particularly in Western Business District (some 31% of total stock) and along Southern Business Axis (some 7% of the total stock). The remaining office space is scattered around the city. In Q1 2018, some 36,600 sq m of new office space was delivered to the market in 3 schemes. They are presented in the table below.
New supply completed in Q1 2018
|Building/Address||District||Rentable office space (sq m)||Developer/Owner|
|Biurowiec BZ WBK ul. Robotnicza||NCBD – Western Business District||17 000||BZ WBK|
|West Link ul. Na Ostatnim Groszu||NCBD – Western Business District||13 900||Echo Investment|
|M5 ul. Michalczyka||NCBD – Subcentral area||5 700||Kernov Properties|
According to Knight Frank, at the end of March 2018, twenty developments were identified at the construction stage, which gives a total of 262,800 sq m of new office space under construction.
One scheme totalling 19,400 sq m is situated in the historical city centre and three buildings amounting to 60,900 sq m are being constructed in subcentral locations. Additionally, six projects amounting to 128,700 sq m are situated in Western Business District, three schemes (24,500 sq m in total) are located in the area of Southern Business Axis and further 29,300 sq m in seven buildings are located in the remaining parts of the city. Fifteen schemes may be completed in 2018 and increase the local stock by some 134,000 sq m. Another five, amounting to 128,800 sq m, are planned to be delivered in 2019.
Office market in Wroclaw in numbers
Selected office buildings at the construction stage in Wrocław (Q1 2018)
|Building/Address||District||Completion date||Rentable office space (sq m)||Developer/Owner|
|Business Garden Wrocław 2 ul. Legnicka||NCBD – Western Business District||Q4. 2019||79 000||Vastint Poland|
|Sagittarius Business House ul. Sucha||NCBD – Subcentral area||Q2. 2018||28 000||Echo Investment|
|Retro Office House ul. Piłsudskiego||NCBD – Subcentral area||Q2 2018||20 900||LC Corp|
|Nowy Targ ul. Świętego Wita||Centre||III kw. 2019||19 400||Skanska Property Poland|
|Carbon Tower ul. Fabryczna||NCBD – Western Business District||Q1 2019||19 100||Cavatina|
|Award Business Park ul. Zwycięska||NCBD – Southern Business Axis||Q2 2018||13 800||Award Business Park|
|CU Office A ul. Jaworska||NCBD – Western Business District||Q4 2018||13 000||Grupa Buma REINO Partners|
|City Forum – City One ul. Traugutta||NCBD – Subcentral area||Q4 2018||12 000||Archicom|
|Diamentum Office ul. Robotnicza||NCBD – Western Business District||Q3 2018||9 200||Cavatina|
|Wielka 27 ul. Wielka / ul. Powstańców Śląskich||NCBD – Southern Business Axis||Q1 2019||9 000||i2 Development|
Additionally, nearly 166,000 sq m of rentable office space in fourteen projects has been identified in the development pipeline with building permits. Six of them, amounting to some 67,000 sq m can be possibly commenced in next 6 months.
Between January and March 2018, 24,100 sq m of office space was leased in Wrocław, which was approximately 60% lower result than the take-up volume registered in the analogical period of a previous year and it constituted 18% of an average annual take-up within three recent years. The most common were new agreements in existing buildings constituting 63% of signed lease contracts. Pre-let agreements comprised 27% of the lease volume, renewals constituted 8% of the take-up while expansions accounted for 2% of the leased space.
Selected lease transactions in Wrocław (Q1 2018)
|Building||Tenant||Leased Office Space (sq m)||Type of Lease|
|Business Garden 1||Santander Consumer Bank||10 000||New lease|
|Nowy Targ||Poufny najemca||4 700||Pre-lease|
|Aquarius Business House I||OVH||2 350||New lease|
|Bema Plaza||Nokia||1 700||Renewal|
|Business Garden 2||Poufny najemca||980||Pre-lease|
|City One||Notus Finanse||550||Pre-lease|
At the end of Q1 2018, the vacant office space in Wrocław amounted to some 78,100 sq m, which accounted for 8.3% of the total office stock. The vacancy rate decreased by 1.1 pp. when compared with the previous quarter. It was a result of the high share of new agreements in existing buildings in the total take-up volume and the fact, that newly delivered schemes were almost fully leased upon completion. Nevertheless, taking into account the significant new supply, that will be delivered to the market by the end of 2018, in the forthcoming quarters an increase of a vacancy rate is expected.
Over the analysed period, asking rents remained stable in most of the projects. Asking rents for office space in B-class buildings ranged between EUR 10-13 or PLN 40-55/sq m/month, whereas A-class premises were offered for EUR 13-15.5/sq m/month. The effective rents were lower than asking rents by about 15-20%.
In addition to base rent, tenants are required to pay:
- Service charges – which are between PLN 12-19 per sq m per month;
- Electricity and telecommunication connections, depending on their consumption;
- Charges for underground parking – in the range of EUR 50-100 per month
- Charges for surface parking – at the level of EUR 30-60 per month, although many buildings provide them free of charge.
The article is prepared by the Partner of Invest in Wroclaw – Knight Frank.