Wroclaw’s business center is growing
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After the delivery of over 147,000 sqm in 2019, the total supply of modern office space in Wrocław came close to 1.2 million sqm. – According to the latest data from Colliers International.
The Wrocław agglomeration is one of the fastest growing urban areas in Poland. Attractive geographical location, providing investors with proximity to the German and Czech markets, good infrastructure and access to qualified employees make the Wrocław market highly active for both developers and tenants.
– In 2019 the demand for office space in Wrocław amounted to almost 123.5 thousand sqm. Such a high result is a result of stable interest in office projects under construction, which translates into a number of pre-let agreements in buildings which will be delivered in 2020. Many of these tenants were advised by experts from our regional office. Last year we represented a total of 25 tenants in the lease of 36.8 thousand sqm, which gives us a 30% share in the local market in transactions with advisors and a leading position among the agencies – notes Dorota Kościelniak, regional director of Colliers International in Wrocław.
The successes of Colliers International’s Wrocław office include the commercialisation of the A and B Cu Office buildings, to which SoftServe, Domodi and TotalMoney have moved, occupying a total of over 15 thousand sqm of the 23 thousand sqm offered. In both phases of the complex, recommercialization of the Silver Tower Center building through finalized renegotiations of lease contracts of Toyota Europe and Luxoft Poland and taking over 19.4 thousand sqm of office space in the management of another office building in Skanska – Nowy Targ.
Business hubs in Wrocław are growing
In the coming business year, the city centre will be extended to the southern area, where new office projects are being developed, e.g: Centrum Południe built by Skanska and Mid Point 71, Echo Investment project.
– Both investments are being developed along Powstańców Śląskich Street, one of Wrocław’s key arteries. It may be assumed that due to the attractive location and convenient communication, further projects in this area are only a matter of time – notes Dorota Kościelniak.
Further office abutments in the southeastern part of the city along Krakowska Street are also enjoying success. This is due to the revitalization of the area both in terms of housing and office construction.
The city centre is complemented by the construction of the Oławska Gate (Tower Inwestycje) and Infinity (Avestus) office buildings. The western part of the city continues to maintain an unflagging and strong position.
Rents are stable, there will be more vacancies
At the end of 2019, the vacancy rate in the Wrocław market amounted to 12.5% due to the delivery of a relatively large amount of office space in the last quarter of the year – over 87 thousand sqm. For the coming year, Colliers’ experts forecast a slow absorption of undeveloped office space and a stable vacancy rate. Rents will remain unchanged – in modern A-class projects tenants have to pay between EUR 13.5 and 15.5 sqm per month, while in older buildings the rates are EUR 8 – 12.5 sqm per month.
Developers are opting for flexible space
Wrocław is a city conducive to the development of not only large corporations, but also smaller organisations. Among other things, the development of R&D companies is visible, which are gradually starting to leave incubators, technology parks and tenement houses, moving to beneficial locations such as coworking areas or serviced offices.
– In Wrocław, we are constantly recording an increased interest in serviced office and coworking space. The most popular are the centres, which in addition to providing functional space, also focus on creating communities. The key advantages of these spaces are undoubtedly the flexible lease length and the possibility of freely increasing or reducing the leased space. It is an excellent alternative for tenants waiting for their target office and for companies which at the initial stage of development find it difficult to estimate how fast their business will develop – says Mateusz Cieślik, senior associate from Colliers International office in Wrocław.
Forecasts for 2020 also indicate an increase in hotel investments – both in terms of the restoration of old palaces and the construction of new facilities. The importance of aparthotels, condo hotels, starters, i.e. flats with an area of several square metres, and private dormitories is also growing – especially after the information that a branch of the British Coventry University will open in Wrocław in 2020.