News Article Cresa Lodz office Poland report
by Property Forum | Office

According to “Occupier Economics: Office Market in Łódź in 2017”, the latest report produced by Cresa, last year’s absorption rate for office buildings in Łódź hit a record high of 55,500 sqm. With office stock at 437,770 sqm, Łódź is Poland’s sixth largest regional office market. The city’s vacancy rate currently stands at 9.3% (up by 3.1 p.p. year-on-year).


“Łódź is going through an interesting phase. Positive investor sentiment in Łódź is consistently growing thanks to new infrastructure improvements, revitalisation projects underway and intense promotion of the city. Łódź is becoming increasingly attractive for tenants, particularly the SSC sector, and its appeal continues to rise fuelled by a substantial supply of Class A office buildings enhancing the city’s skyline and leading to the refurbishment of lower grade schemes,” says Marta Pyziak, Head of Cresa’s Łódź Office.
 
With 74,000 sqm delivered to the Łódź market in 2017, the city’s office supply set an all-time high, bringing its total office stock to 437,770 sqm. Nine office schemes were completed last year, including Przystanek mBank (24,700 sqm, Ghelamco), Nowa Fabryczna A and B (19,500 sqm, Skanska) and Symetris Business Park II (9,500 sqm, Echo Investment). Nearly 124,000 sqm is currently under construction, including a large-scale development Brama Miasta to be delivered in 2020 (38,600 sqm, Skanska) and Monopolis scheduled for 2019-2020 (23,400 sqm, Virako).
 
Last year’s office take-up totalled 58,700 sqm and was close to the three-year average. Key lease transactions on the Łódź market included a 10,000 sqm renewal and expansion by Fujitsu Technology Services at Textorial Park, a 6,600 sqm lease at Ogrodowa Office by a confidential tenant, and McCormick’s 3,600 sqm lease at Nowa Fabryczna A.
 
“We expect leasing conditions to hold stable in Łódź. Given the robust office supply and expansion of the SSC sector, asking rents are likely to remain flat at €10-11.5/sqm/month in Class B office buildings and at €12.5-13.5/sqm/month in Class A schemes,” says Bolesław Kołodziejczyk, PhD, Head of Research & Advisory, Cresa Poland.
 
This year’s office supply is unlikely to match the volume posted in 2017. A rebound is, however, expected in 2019 and 2020 with more than 75,000 sqm of new office space coming on stream on the Łódź market.