Offices

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.

OfficeMarket_mapa_PL-01

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.

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Office market in Wroclaw in numbers


1

942 000 m2

Total office stock


3262 800 m2

Supply under construction


48,3%

Vacancy rate


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

Office take-up in Wrocław (2013- Q1 2018)

 


Vacancy rate in Wrocław (2013 – Q1 2018)

 


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.

kf

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