As shopping centre markets reach maturity in most European countries, there will be growing polarisation between successful prime schemes and struggling secondary sites which are having to diversify to survive, according to new research from Cushman & Wakefield.
The increased interest of global corporations in coworking spaces was a notable trend that impacted on the office markets of the four largest capital cities in Central and Eastern Europe (CEE) in 2018. The total flexible office stock of Budapest, Moscow, Prague and Warsaw stands at 286,000 sq m, accounting for approximately 1% of the combined office market of these cities (29.9 million sq m). Demand generated by coworking operators in 2018 made up 5% of the overall office take-up in the CEE capital cities.
The Polish real estate market has been on a strong growth path for more than a decade. Its office sector is in good health, evidenced by a high number of new office completions and building permits, rising transaction volumes and the growing capital values of office buildings. On the other hand, the ever stronger competition is forcing real estate owners to further improve sales processes. Against this backdrop, professional marketing services are becoming critical in effective real estate commercialisation.
Amsterdam, Stockholm, Helsinki and Dublin are among the major cities featured in a new research report from Cushman & Wakefield into the coworking and flexible office sectors, which pinpoints future demand and the next likely growth hotspots across Europe. Jan Szulborski, Consultant, Consulting and Research, Cushman & Wakefield, said: “Warsaw witnessed the beginnings of a rapid surge in coworking space supply about seven years ago. Its coworking stock, which currently amounts to 77,400 sq m, has been growing at the annual rate of approximately 70%. The growth of the flexible office sector goes hand in hand with changes to the traditional work concept which has been evolving from cellular offices and open space layouts right through to Activity Based Working. Coworking operators are expected to maintain their current momentum in the coming years, and Warsaw’s flexible office stock is likely to exceed 150,000 sq m. Benefiting from the rapid expansion of coworking operators, Warsaw now leads the way in Central and Eastern Europe in terms of its coworking share of the city’s total office stock (0.9%) and the share of coworking operators in the overall leasing volume (10.7%).”
Global real estate services firm Cushman & Wakefield summarises the Lublin office market at year-end 2018. The growth of the Lublin office market is being driven largely by local developers. In 2018, total office take-up hit 14,100 sq m, which represented an almost 61% increase on 2017’s level and the best market performance on record.
Global real estate services firm Cushman & Wakefield summarises the Łódź office market at year-end 2018. The last four years witnessed robust occupier activity on the Łódź office market, which pushed the city’s vacancy rate down to 8.7%. Due to a limited choice of options, firms searching for offices sized below 1,000 sq m have to opt for buildings completed before 2009. This is expected to improve in 2019 following the completions of several office projects that will provide more than 77,000 sq m in total.
Global real estate services firm Cushman & Wakefield summarises the Krakow office market at year-end 2018. Krakow continued its lead among regional city office markets in 2018. Its total office stock reached 1,257,500 sq m, of which 155,200 sq m was delivered in 2018 alone. 2019 is set to be an even better year with more than 190,000 sq m of office space scheduled for completion across 17 new projects.
Global real estate services firm Cushman & Wakefield summarises the Tricity office market at year-end of 2018. With 775,000 sq m of office stock, Tricity is the fourth largest regional city office market in Poland. Office absorption outstripped new supply in the last two years by 19% and 13%, respectively, and in 2018 alone amounted to more than 87,500 sq m. Healthy occupier activity and stable supply levels pushed Tricity’s vacancy rate down to 6.1% at the end of 2018, one of the lowest of all regional markets.
Global real estate services firm Cushman & Wakefield summarises the Szczecin office market at year-end 2018. The Szczecin office market reported the second consecutive year of strong absorption – net office absorption was nearly four times the new supply, say Cushman & Wakefield’s analysts. Tenants therefore need to wait until new projects deliver a total of 48,000 sq m.
Wrocław is Poland’s second largest regional city office market after Krakow. In 2018, its total office stock surpassed the one million sq m mark following a 16% increase to 1,054,200 sq m. Of last year’s 14 office completions providing a total of 146,600 sq m (+187% y/y), the largest were Echo Investment’s Sagittarius Business House (24,900 sq m), LC Corp’s Retro Office House (18,200 sq m) and BZ WBK’s BZ WBK Office Building (17,000 sq m).
Real estate transaction volumes in 2018 were the strongest on record reaching US$1.75 trillion; a 4% year-on-year (y/y) growth and surpassing previous highs of US$1.68 trillion in 2017, according to new data from global real estate services firm Cushman & Wakefield. Soren Rodian Olsen, Head of Capital Markets Poland, Cushman & Wakefield: „In line with the trends across EMEA, CEE continues to attract global capital, and in particular Asian equity has been very active during the past 12 months, bidding on core office opportunities in CEE capital cities, as well as targeting logistics assets with long-term income profiles. In Poland, we anticipate that 2019 may become the most diverse investment year ever, in terms of different sources capital inflow.”
At the end of 2018, Poland’s industrial and warehouse stock reached 15.79 million sq m. Around 2.22 million sq m of modern warehouse and industrial space was delivered to the market last year, down by just 6% on 2017’s level. Occupier activity remained robust throughout 2018 with warehouse take-up reaching 3.98 million sq m, which represented a 2.5% decrease compared with 2017. New lease agreements and extensions accounted for approximately 76% of all deals.