Office development in Poland is at its lowest level for eight years because the pandemic has encouraged a more cautious approach and decreased office demand, according to JLL.
However, regional markets are holding their ground with 800,000 sq m under construction.
The firm said that the reintroduction of COVID-19 restrictions has had an effect on corporate planning and decision-making leading to a slowdown in office market activity during the first three months of 2021.
Demand for office space in Poland totalled 208,000 sq m between January and March 2021 which was 41% less, year on year.
“In the major office markets outside of Warsaw , demand in Q1 totalled 98,300 sqm, with tenants at their most active in Tri-City, Kraków and Wrocław,” said JLL director of regional markets Karol Patynowski. “Interestingly, renegotiations made up 45% of total activity in the regional cities,” he added.
IT companies account for 35% of deals outside Warsaw
Demand for offices in regional markets was driven by IT companies which accounted for 36% of transaction volume outside Warsaw. Business services was responsible for 17% and the financial sector for 11%.
Nationally, the IT sector accounted for 21% of take-up.
“Although many companies in Poland are holding back on final decisions regarding changes to their office portfolio due to the pandemic, we are seeing some recovery in this area and the laying out of strategies for the new normal,” said Patynowski. He said JLL has recently acquired new tenant representation projects for about 70,000 sq m of which 25%-30% are enquiries from newcomers, mainly in the business services, IT and medical sectors.