Big 7 on investors, tenants and developers radar

According to analysis by international advisory firm JLL, the Big 7 Polish office markets – including Katowice – are developing dynamically and remain on the radar of both capital investors operating on the real estate market and companies, i.a., from the business services sector.

According to JLL, GDP growth, rising tenant activity, transparency of the real estate market and the availability of different investment products at attractive prices are driving the growth of Poland’s seven biggest office markets.

„Warsaw is the biggest business and financial center in both Poland and Central and Eastern Europe. Other major cities are also developing and managing to attract companies from the business services sector, and international capital investment on the real estate market. Currently, not only Warsaw, but also Kraków, Wrocław, Tri-City, Katowice, Poznań and Łódź offer interesting opportunities to purchase commercial buildings. This dynamic development of office markets is bolstered by the favorable economic conditions in Poland as well as the positive forecasts for further GDP growth” – commented Tomasz Trzósło, managing director at JLL.

Today, the office market in Poland is tenant-favourable and allows them to choose from modern office buildings either existing or under construction. By the end of 2015, the vacancy rate was 13,2% in Katowice. Following rates were noted in the remaining six main office markets: 12,3% in Warsaw, 5,5% in Kraków, 8,6% in Wrocław, 10,8% in Tri-City, 15,9% in Poznań and 6,9% in Łódź.

Katowice is the fifth largest office market in Poland (397 400 sq. meters at the end of 2015). Last year’s office take-up was 62 500 sq. meters, according to JLL, and the biggest lease agreement was signed by Tauron (10 000 sq. meters in Katowice Business Point). The analysts point out, that a noteworthy trend on the Katowice office market is the activity of Polish tenants.

By the end of the year, prime headline rents were between EUR 12,5-13,5 /sq.m/month. As of the end of 2015 prime office yields in Katowice were approximately 7,5% (as it was in Łódź). In comparison, the European average office prime yield – a weighted average for 24 major markets in the region – was 4,53% in Q4 2015. The yields were 5,25% in Warsaw and 6,25% in Kraków and Wrocław, for example.