In 2019, Lublin’s total office stock amounted to 191,200 sqm with no new office projects delivered to the market in the last 12 months. In 2017-2018, the city’s office stock expanded by nearly 40% following a period of robust local development activity. Cushman & Wakefield summarised 2019 on Lublin’s office market.
“2017 was the best year for Lublin’s office market in its history. It saw four office completions that totalled 30,455 sqm. In 2018, local developers delivered three office buildings with a total area of 25,354 sqm,” says Michał Grabowiecki, Negotiator at Cushman& Wakefield.
Take-up
Total leasing activity hit 8,900 sqm in 2019. The largest deals included leases for office space in CZ Office Park A signed by Santander Bank Polska (4,700 sqm) and Lingaro (650 sqm), the 1,000 sqm lease renewed by Predica in Gray Office, and Strabag’s lease for 920 sqm in Point 75.
“Lublin attracted new tenants, including PWC, Capgemini, and Lingaro, which opened their offices in the city last year. Key decision drivers include a skilled labour pool, modern offices and lower operating costs compared to Poland’s largest office markets,” says Agnieszka Gułaś, Negotiator, Cushman & Wakefield.
Vacancies
The last three years witnessed robust occupier activity which pushed Lublin’s vacancy rate down from the peak of 20.2% to 9.25% at the end of 2019. At present, Lublin has nearly 17,700 sqm of ready-to-occupy office space. Availability fell by more than 41% in the space of the last 12 months.
Rents
In 2019, office rents remained flat at €12.00/sqm/month at Lublin’s newest grade A office buildings. At other office buildings, rental rates stood at €10.00/sqm/month.
Outlook
“Occupier activity is likely to be subdued in the first half of 2020 due to the limited availability of office space in Lublin. By contrast, the second half is expected to see the first pre-lets at buildings scheduled for delivery in early 2021,” says Jan Szulborski, Senior Consultant, Cushman& Wakefield.
Against a backdrop of the shrinking office availability and the growing demand coming from the business services sector, Lublin’s office stock is expected to expand by nearly 40,000 sqm in 2021 following the delivery of three office buildings that are currently in the pipeline. The schemes underway include CZ Office Park II (16,500 sqm, Centrum Zana), Gęsia 7 (14,800 sqm, JBU Sp. z o.o. Sp .K.), and Wojciechowska 9 (6,300 sqm, W9 Investments S.C.).
