Jones Lang LaSalle summarized Katowice office market

More than 50 000 sq. meters of office space were leased in Katowice last year and the new supply was more than doubled when compared with 2011. The strong tenant activity resulted in the ongoing absorption of existing office space what encourages developers to start new office projects – these are the most significant conclusions of the Jones Lang LaSalle’s report on the Katowice office market in 2012.

© Jones Lang LaSalle; Katowice office market: gross take-up and vacancy rate
© Jones Lang LaSalle; Katowice office market - February 2013: gross take-up and vacancy rate

The total modern office space in Katowice will soon exceed 300 thousand square meters. At present the City offers more than 290 000 sq. meters of office stock and is ranked fifth in terms of total office space in Poland (after Warsaw, Kraków, Wrocław and Tri-City).

The volume of total new supply was more than doubled last year in comparison to 2011. Developers delivered 20 650 sq. meters of space in 2012 and currently around 32 500 sq. meters of modern office stock in Katowice is in construction stage. The schemes being under construction include, among others: A4 Business Park I (9 120 sq. meters), Euro-Centrum’s passive building (6 300 sq. meters) and the Polski Koks headquarters (6 150 sq. meters, to be occupied by the owner).

The JLL’s report says the existing vacant space is being well absorbed by the market, so developers are becoming more willing to announce and start new office projects. Further extension of office projects is possible to be implemented by the Upper Silesian Industrial Park (22 500 sq. meters within next stages of GPP Business Park) and Echo Investment (23 620 sq. meters in A4 Business Park II and III). New office investments are also taken into consideration.

Existing buildings provide around 29 000 sq. meters of immediate available space for rent, which corresponds to a 10,0% vacancy rate for the City. A further 20 800 sq. meters is available in developments currently under construction.

Leasing activity was up during 2012, take-up totalled 51,400 sq. meters (up 43% compared to 2011). Almost 52% of signed leases were new deals, 20% constituted pre-lets and 18% renewals. The largest deals in 2012 included: Unilever (pre-let of 5 400 sq.m), Telefonika Kable (new deal for 3 280 sq. meters and expansion for 1 500 sq.m), Steria (renewal of 2 840 sq.m), Aegon (renewal of 2 450 sq.m), ING Group (new deal for 2 400 sq.m), Getin Bank Polska (new deal for 2 200 sq.m), PZU Group (renewal of 2 110 sq.m) and Rockwell Automation (new deal for 2 000 sq.m).

Katowice and its conurbation is an attractive option for corporations from the business services sector. The City features a reasonable amount of high quality immediately available office space of 1 000 sq. meters and more, meeting the requirements of the sector (5 potential options in existing buildings and 3 in projects under construction). Tenants typically choose Katowice having analyzed the bottom line costs such as rental levels for office space and labour cost, in conjunction with immediate access to more than 2,2 million people who live within the wider Katowice metropolitan area and strong position as academic center (3rd in Poland with more than 180 000 students).

Headline rents in Katowice decreased over the last couple of years to EUR 12,00 –13,50 /sq.m/month at the end of Q4 2012. Jones Lang LaSalle’s analysts expect that due to improving market fundamentals the effective rental level will increase slightly during 2013.

© Jones Lang LaSalle; Katowice office market report 2013: summary statistics
© Jones Lang LaSalle; Katowice office market - February 2013: summary statistics

source: Jones Lang LaSalle