According to a report published by BNP Paribas Real Estate Poland, around 715,000 sqm of modern office space was under construction within Poland at the end of 2021. With the growth of office space experts also note the strengthening of the hybrid and flexible work models as well as the growing importance of ESG solutions.
Last year lease agreements were concluded for a total of nearly 600,000 sqm of space. The last quarter turned out to be the busiest with a total of 215 000 sqm of office space signed. According to the BNP Paribas Real Estate report in 2021 the demand structure was dominated by new contracts (47%), followed by renewals (43%) and expansions (8%).
Krakow is still the favourite
Krakow turned out to be the regional leader with the largest supply of modern space – over 1.6 million sqm – and the greatest interest among potential tenants, accounting for 26% of total demand in 2021. The second largest office hub is Wrocław, with current office stock exceeding 1.25 million sqm. The third place is the Tricity area, whose main driving force in 2021 were IT & services and business services.
Missing tenants
The report also reveals that at the end of 2021 there was just over 850,000 sqm of space, ready to accept new tenants immediately. The tenantless properties ratio at the end of December 2021 was 14.1%, +1.4% higher than a year earlier.
Busy Q4
In 2021, regional markets grew by over 225,000 sqm of modern office space. The most significant, accounting for over 73,000 sqm, was the new supply in Tricity. Kraków took second place with 60,000 sqm, followed by Poznań with 37,500 sqm. The report indicates that the last quarter was relatively busy, resulting in the delivery of a total of over 79,000 sqm of new offices, located in seven buildings – the 3T Office Park complex in Gdynia being the largest.
2021 was the year of lease extensions
Of the six largest contracts signed, five were extensions of existing contracts and one was a pre-lease. The largest transaction in 2021 was concluded at the Green Horizon complex in Łódź. It was the renewal of a contract for 24,000 sqm by a tenant from the IT & Services sector. The next in line was the extension of a contract with an expansion by Rockwell Automation (19,500 sqm) at the A4 Business Park III in Wrocław, and the third was the renewal of a contract from the financial sector (17,400 sqm) at the Poznań Business Garden complex.
New demands
The report also draws attention to the fact, that in 2021 tenants, employees, managers, developers and the offices themselves, quite efficiently adapted to the hybrid work model.
From the analysis, it can be readily noted, that in the coming quarters, important criteria for selecting an office, in addition to location and commercial parameters, will be effective solutions that meet the requirements of sustainable development and ESG. This will be particularly important in the case of older buildings, especially in the forthcoming lease cycles.
