Flexible office spaces become increasingly popular in Łódź
According to the latest Cresa Poland report, “Occupier economics: Office Market in Łódź” office stock in this city amounted to 496,700 sqm at the end of June 2019, posting an over 13 percent increase year-on-year in H1 2019. The cumulative annual growth rate for 2012-2019 hit nearly 10 percent.
"Flexible office leases are becoming increasingly popular on the Łódź market. This attracts other flexible office operators, giving tenants more choice. Market players include Regus, Co:Spot and BiznesZone, to be joined this year by New Work, which will locate its business in Imagine and Hi Piotrkowska," says Marta Pyziak, Head of Łódź Office at Cresa Poland. "Flexible office tenants largely comprise companies that for operational reasons are not interested in long-term leases or need relatively small spaces. Flexible leasing is also favoured by start-ups, freelancers and fast-growing companies. Flexible office operators’ clients increasingly include large corporates using flexible offices for specific projects or as temporary office space."
The first half of 2019 witnessed two office completions: Brama Miasta I (25,500 sqm, Skanska) and Sepia Office (2,300 sqm, OPG Property Professionals). Another 60,000 sqm of office space is expected to be delivered by the end of this year.
In H1 2019, office take-up amounted to nearly 33,000 sqm, representing an over 16 percent increase on the same period in 2018 and accounting for as much as 62.5 percent of the average annual leasing volume for 2013-2018. Tle largest transaction was the lease of 5,000 sqm in Hi Piotrkowska 155 by New Work. Nordea Operations Centre took office space in two buildings: Red Tower (3,300 sqm) and in Cross Point (3,250 sqm). The Flint Group has expanded in Łódź 1 office building to 3,350 sqm.
Absorption hit 8,200 sqm in H1 2019, matching the absorption level recorded in the same period a year earlier.
"Robust supply in the second quarter of 2019 pushed the vacancy rate up by 3.5 pp to 12.1 percent. Developers planning new projects in the past two years seem to have overestimated the market’s capacity to absorb new space. The vacancy rate has returned to the 2012-2014 levels and will continue to experience an upward trend at least until early 2020. Looking ahead, absorption is likely to remain stable, but the availability of suitably skilled labour will limit the pace of the market’s growth," says Bolesław Kołodziejczyk, PhD, Head of Research & Advisory, Cresa Poland.
Asking rents currently stand at EUR 8,5-9,5 sqm/month in lower class buildings and EUR 11-14 sqm/month in upper class buildings.