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Poznań’s office stock tops half a million sqm

Global real estate services firm Cushman & Wakefield has summarised 2019 on Poznań’s office market.

Supply

In 2019, Poznań saw its total office stock expand by nearly 18 percent to 564,800 sqm following the delivery of ten office projects totalling 85,700 sqm. The largest completion was the second phase of Vastint’sBusiness Garden Poznań, which consists of five office buildings with a total area of 46,100 sqm. In addition, the first two buildings of the NowyRynek complex delivered 30,700 sqm of office space to the market.

“Due to the relatively large volume of new office space coming on stream in 2019, most new projects have been put on hold in Poznań until the impact of the supply peak on the city’s office market is fully assessed,” says Jan Szulborski, Senior Consultant, Cushman& Wakefield.

Take-up

Office take-up hit 40,700 sqm in 2019, down by nearly 42 percent on 2018’s level. New leases accounted for more than 62 percent of all deals, while renegotiations and expansions made up 29 percent and 9 percent, respectively. The largest deals of 2019 included a new lease for 3,420 sqm in Business Garden Poznań, and 3,000 sqm leased through renegotiation and expansion in Andersia Business Center. The confidential tenants were represented in the two transactions by global real estate services firm Cushman&Wakefield. The third largest deal was the 2,790 sqm lease renewed by Arvatoin the Globis Office Centre.

“Companies planning to expand in the capital of the Greater Poland region value this market for its stability and predictability. Poznań has been a hotspot for BPO/SSC tenants for long, particularly from the F&A, IT, and call/service centre sectors, but it is also attracting other occupiers,” says Grzegorz Bobrowski, Negotiator, Cushman& Wakefield.

Vacancies

Poznań’s vacancy rate currently stands at 10.8 percent, up by 3.6 pp over the last twelve months.

“Nearly 50 percent of unoccupied office space available in Poznań is in the Business Garden Poznań complex. As for other areas of the Poznań market, there is limited office space to let, particularly for tenants looking for units sized more than 1,000 sqm,” says Jan Szulborski.

Rents

In 2019, office rents averaged EUR 14.50/sqm/month in the centre of Poznań. Due to the limited availability of office space in downtown Poznań, headline rents are likely to come under upward pressure, with lease incentives being scaled down.

Outlook

The development pipeline includes two office buildings with a total area of 51,100 sq m: Giant Invest’s Giant Office (15,300 sqm), scheduled for delivery in the first half of 2020, and another phase of Skanska’s NowyRynek (35,800 sq m), which is to be delivered to the market in the second half of 2021.

“Poznań’s office market has recently gained momentum, driven among other things by the growing demand for coworking spaces. Coworking operators present on this market are reporting excellent results, which will certainly encourage other flexible office landlords to open new locations in Poznań before long,” adds Grzegorz Bobrowski.

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