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Wroclaw office market: Q2 2022

Offices in Wroclaw, new investments, vacancy and leasing - everything related to the office market was taken under the microscope by experts from the Polish Chamber of Commercial Real Estate (PINK). Two quarters of 2022 (Q2 2022) were analysed, and Wroclaw is the third office market in Poland, after Warsaw and Krakow. The report used data from the largest commercial real estate advisory firms.

The Polish Chamber of Commercial Real Estate (PINK) published data on the office space market in eight major regional markets in Poland (Krakow, Wroclaw, Tricity, Katowice, Poznan, Lodz, Lublin, Szczecin) for Q2 2022.

The report is highly authoritative, as the source of the information is commercial real estate advisory firms (BNP Paribas Real Estate, CBRE, Colliers, Cushman&Wakefield, JLL, Knight Frank, Newmark Polska, Savills), and the summary covers existing modern office space, new buildings delivered, lease transaction volumes and vacant space.

New offices in Wroclaw and an office building sold for €100 million

Wroclaw has seen a record-breaking transaction in the office market in 2022. The MidPoint71 complex on Powstańców Śląskich Street was sold for more than €100 million. This is the largest office building in Wroclaw completed this year. Thus, Echo Investment's project has expanded the Wroclaw office market by more than 36,000 sqm of space.

MidPoint 71 was built in the vicinity of Sky Tower, the tallest skyscraper in Wroclaw, and the Centrum Południe complex on Powstańców Śląskich Street.

A Wrocław city and business center is being built at Powstańców Śląskich Street

17 floors, over 21,000 sqm of office space, terraces for tenants or a basketball court - this is what the newest skyscraper in the Centrum Południe office complex, which Skanska is building on Powstańców Śląskich Street, will look like.

After Warsaw and Krakow, Wroclaw is the third office market in Poland

At the end of the second quarter of 2022, the total existing stock of modern office space in the eight major regional markets amounted to 6,335,700 sqm. Invariably, the largest office markets in Poland (after Warsaw) remained Krakow (1,666,200 sqm.), Wroclaw (1,284,500 sqm.) and the Tricity, whose office stock in the second quarter exceeded the ceiling of 1 million sqm. (1,010,900 sq. m.)

PINK's report says.

In the Polish office market, 10 buildings with a total area of 68,300 sqm were put into use in the second quarter of 2022, with the largest number in Krakow (about 26,300 sqm), the Tricity (18,800 sqm) and Lodz (18,800 sqm).

Occupancy and vacancy in regional office markets

At the end of the second quarter of 2022, there was 961,000 sqm of office space available for immediate lease in the eight major regional markets, which corresponds to a vacancy rate of 15.2% (a decrease of 0.3 sq.m. quarter-on-quarter and an increase of 1.8 sq.m. compared to the same period in 2021). The highest vacancy rate was recorded in Lodz - 18.6%, and the lowest in Szczecin - 4.9%. Lease transactions in the second quarter of 2022 totaled 189,600 sqm, which is 24% more than in the previous quarter, and 12% more than in the corresponding period of 2021. Most space was leased in Krakow (73,900 sqm), Wroclaw (25,600 sqm) and Gdansk (25,100 sqm).

Office lease prices in Wroclaw 2022.

Asking rents in Wroclaw at the end of March 2022 ranged from €10 to €16 per sqm per month.

In the near term, expect pressure from tenants to renegotiate rents and incentive packages due to the high availability of office space. On the other hand, rising construction costs (increases in the price of construction materials and labor costs), as well as increases in the cost of servicing construction loans, may effectively inhibit investors' negotiating power, especially in new buildings. On the other hand, in all projects, an increase in service rates can be expected, due to the progressive increase in the prices of services and utilities.

Knight Frank experts.