In the third quarter of 2019, Łódź’s total office stock reached almost 518,000 sqm, surpassing the long-awaited half a million sqm mark, says Cresa Poland in its latest report.
“The office space growth is likely to further strengthen the economic and business ties between Łódź and Warsaw. Meanwhile, this year’s high supply levels have pushed the vacancy rate up, which will encourage some tenants to relocate or take advantage of an opportunity to renegotiate leases,” says Marta Pyziak, Head of the Łódź Office, Cresa Poland.
The third quarter of 2019 saw four office completions: Imagine I & II (14,800 sqm, Avestus Real Estate), Stara Drukarnia (4,700 sqm, Joka), Business House II (1,800 sqm, Business House) and Szkoła Grohmana (1,000 sqm, Royal Mill Investment Group).
Office take-up climbed to 43,600 sqm in the first three quarters of 2019, up by more than 30% on the same period last year. The largest transactions in Łódź in the third quarter of 2019 included 5,000 sqm leased by New Work in Hi Piotrkowska 155 and two leases signed by Nordea Operations Centre for 3,300 sqm and 3,250 sqm at Red Tower and Cross Point, respectively.
“The office market in Łódź remains stable despite high supply levels. The city’s vacancy rate remained unchanged over the last quarter at 12.1%, but was up by 2.4 pp year-on-year. Absorption hit 18,600 sqm in the third quarter of 2019, whereby the volume of occupied space has increased in the year to date by 26,700 sqm, roughly the same as in the same period in 2018. Given the occupier interest, new office buildings are likely to be fully let eventually. This will, however, take time, which may temporarily weaken developers’ appetite to commence new projects,” says Bolesław Kołodziejczyk, PhD, Head of Research & Advisory, Cresa Poland.
Asking rents stand at €8.5–9.5/sqm/month in Łódź’s lower class office buildings and at €11–14/sqm/month in higher grade buildings.
