Northern potential and rising vacancy

Office & mixed-use development
POLAND The office market in northern Poland is continuing to develop and has good prospects for the future, according to the ‘Northern Poland – Prospects for Business Services’ report just published by Colliers and Adecco. The authors of the survey are predicting that the vacancy rate in Gdańsk is set to increase. The report is focused upon five office investment locations in the north of the country: the TriCity, Szczecin, the Bydgoszcz-Toruń agglomeration, Białystok and Olsztyn.

Tri-City on the top

The TriCity is the largest office market in the north of Poland, where over 70 pct of the existing supply is located in Gdańsk. In the first half of 2015, more than 30,000 sqm was completed. In H2 2015, the vacancy rate over the entire conurbation will trend upward. This in particular applies to the Gdańsk market, which will record the highest growth in new stock. Due to the wide variety of leasing options and the growing competition between developers, tenants should be able to negotiate favourable financial terms (for both new agreements and the renegotiations of existing contracts).

Free space inSzczecin

Szczecin currently has 20,000 sqm of office space under construction. The new projects scheduled for completion by the end of the year include Storrady Park Offices and Kosmos Art & Business Centre. Almost 17 pct of the existing supply remains vacant, which translates into almost 19,000 sqm of vacant space. “The advantage of Szczecin and its surrounding area is its rapid development. Companies operating here can count on the support of the local authorities, institutions and professional consulting companies. Szczecin, like no other city, is popular among Nordic companies. It has production, logistics, renewable energy, BPO and shared services centres that offer opportunities for the local young, educated workforce,” comments Katarzyna Raczkowska, the Szczecin branch manager of Adecco Poland.

Bydgoszcz more popular than Toruń

The total supply of office space in the Bydgoszcz-Toruń agglomeration is estimated at 95,700 sqm. Bydgoszcz office stock now amounts to 52,600 sqm, while in Toruń the figure stands at 43,100 sqm. The widest offer is aimed at tenants looking for small and medium-sized units. Bydgoszcz is the definite leader in terms of investment plans. Projects under development total almost 60,000 sqm. These include Arkada Business Park, the second building within the Scanpark Business Center complex, Immobile K3, F262 and Business Park Teta. The vacancy rate in Bydgoszcz is currently at the level of 10.1 pct, but is 18.4 pct in Toruń.

Locals inBiałystok

Although the vacancy rate in Białystok is around 13 pct, the amount of vacant space is only 5,100 sqm. The size of available units varies from 50 sqm to 200 sqm. The northwestern city offers almost 40,000 sqm of office space that meets class ‘B’/‘B+’ standards. Existing office buildings are located mostly in the central part of the city, with the market being dominated by office buildings below 4,000 sqm gla built by local developers. “Białystok, due to its location and development prospects, is considered to be the centre of East-West dialogue and an attractive city for business. From the investors’ point of view, the strengths of Białystok include: labour costs 10 pct lower than the national average, well-developed academic institutions, the availability of qualified staff, continued improvement in the transport infrastructure and a high level of technical resources,” claims Marcin Giebień, the regional sales manager of Adecco Poland.

B+ class dominates in Olsztyn

The supply of modern office space in Olsztyn currently totals 40,400 sqm. Most of the existing supply consists of class ‘B’/’B+’ class properties, while class ‘A’ buildings make up only a small proportion of the total volume of office space. More than half of the existing supply is accounted for by two office developments: Cezal Business Center and Europa Center. The vacancy rate in the Masurian city is currently at 29.7 pct. Similar to other smaller markets, property owners are offering both the lease and sale of commercialised units. The development pipeline includes 7,000 sqm scheduled for delivery with the completion of the Centaurus office building, which is being developed by Euro Styl). Construction work on the project is to start in H2 2015, while its completion has been scheduled for 2017.