Lublin’s total office stock remained unchanged at the end of June 2019, flatlining at 191,200 sqm, according to Cushman & Wakefield. Despite the lack of new supply, occupier activity was healthy, which pushed the city’s vacancy rate down to 10.6%, representing a 9.1 pp decrease year-on-year.
In H1 2019, leasing activity in Lublin hit 6,700 sqm (-26% y/y) and the largest transactions were finalised by Santander Bank Polska (4,700 sqm) and Lingaro (650 sqm) in CZ Office Park A, and Strabag (920 sqm) at Point 75. Strong take-up pushed Lublin’s vacancies down to 20,200 sqm, but had no effect on average rental rates that held firm at €12.00/sqm/month.
Lublin will see new office supply in 2021. Developers have already broken ground on two out of four projects: CZ Office Park II and Wojciechowska 9, which will add approximately 40,000 sqm to the city’s office stock.
“Lublin has enjoyed several years of strong interest coming from modern business services centres, particularly the IT sector. New investor interest and the continued growth of employment in companies operating here are key catalysts for further expansion of Lublin’s office market. This market’s growth will also be driven in the near future by the S17 expressway (Lublin-Warsaw), which is nearing completion and is the first of several projects designed to improve road access to the city. The last two years witnessed record levels of new supply. In 2017 and 2018, Lublin’s office market expanded by almost 40%. Healthy occupier demand in the first half of 2019 pushed the city’s vacancy rate substantially down in a relatively short time. Looking ahead, we expect new projects that will be completed in Q1 2021 to attract strong occupier interest,” says Michał Grabowiecki, Negotiator, Office Agency, Cushman & Wakefield.
