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Technology firms dominate Poland’s office deals YTD: JLL

Olivia Business Center, Gdansk.

Technology companies have been a major component of demand for office space in Poland during the first three quarters according to JLL. Of the 15 largest deals, 11 were signed by technology companies.

The firm said that between January and end-September almost 907,000 sq m was leased across the country of which 43% was attributable to technology companies.

The country’s regional markets have seen significant demand.

“Since the beginning of the year demand for office space outside Warsaw was almost 460,000 sq m,” said JLL Poland’s director of regional markets Karol Patynowski.

He points out that while the total was 11% lower than the corresponding period in 2019, Wrocław, Łódź and Tri-City –which includes Gdańsk, Sopot and Gdynia – fared better with take-up increasing 66%, 46% and 11% respectively.

Lease renewals and subletting significant

A large portion of demand recorded between January and September was accounted for by lease renewals, which represented 53% in Q3 2020 alone.

Patynowski explained that: “Due to the current situation, companies often decide to renew their leases rather than relocate.”

He said that another noticeable trend was the increase in space for sub letting. About 116,000 sq m of such space is in the major office markets outside Warsaw. Of this, 30% is in Wrocław, followed by the Tri-City with 23% and Kraków with 22%.

The biggest lettings of the year to date include PZU in Generation Park Y (46,500 sq m), DSV’s sale and leaseback at Mokotów (20,000 sq m), and the renewal and expansion of Poczta Polska in Domaniewska Office Hub (19,800 sqm), all in Warsaw.

The country’s total supply of office space stands at 11.5 million sq m, of which 5.7 million sq m lies in the regions. In the first three quarters about 540,000 sq m was completed in Poland, including over 305,000 sq m in the regions.

The biggest office projects completed between January and September in Poland included: The Warsaw Hub mixed-use complex (89,000 sq m, Ghelamco Poland), Warsaw’s office buildings Varso I&II (46,600 sq m, HB Reavis) and Chmielna 89 (25,200 sq m, Cavatina Holding), Olivia Prime B w in Gdańsk (25,000 sq m, Olivia Business Center) and three buildings developed by Skanska Property Poland: Centrum Południe in Wrocław (23,700 sq m), Wave A in the Tri-City (26,600 sq m) and building 4 of the High5ive complex in Kraków (23,500 sq m).

JLL said Investor activity in the office sector remains “robust”  with 26 office transactions worth over €1.54 billion finalised in the first three quarters, the third highest volume on record for the first nine months of the year. Investors were more active outside Warsaw, the firm said.