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A variety of flexible lease options along with increased demand from business services sector companies are major trends on the Poznań office market at the end of Q3 2013.
Warsaw, Poznań, November 25, 2013 – Jones Lang LaSalle’s experts summarise data and trends for the Poznań office market at the end of Q3.
Jakub Sylwestrowicz, Head of Tenant Representation, Jones Lang LaSalle, commented: "Poznań is, economically speaking, one of the strongest Polish regions. For the last few years, Poznań has been one of the most popular foreign investment destinations not only for the manufacturing industry but also for the business services sector. This is due to its well-developed transport infrastructure and access to a highly-qualified workforce. Foreign investment inflow along with a high level of activity from some Polish companies, are also contributing to Poznań's office market development.
Demand - business services sector as a major driver of Poznań's office market development
In Q3, gross demand in Poznań was approximately 9,500 sq m., 8,400 sq m of which was included in new contracts. The largest deals in Q3 were Newell Rubbermaid (new lease, 1,925 sq m Andersia Business Center), Ciber (expansion, 1,690 sq m Malta House) and DFDS Poznań (new lease, 1,600 sq m, Globis). The largest deal completed this year was a pre-let agreement for 3,140 sq m in Malta House, by Franklin Templeton. In total, 28,600 sq m has been leased from January to October.
Waldemar Olbryk, CEO, Skanska Property Poland, said: "Poznań is an attractive destination for office market projects. We observe a growing number of potential tenants, especially from the business services sector. According to ABSL data, companies representing this sector employ more than 6,000 specialists in Poznań and this number grows by 20-30% year on year, which is 5-10 percentage points more than the national average. It should be pointed out that the growing demand for office space stems from new investment as well as the expansion of companies, who are already present in the city. An example of such a company is Ciber, which initially leased 1,000 sq m in the Malta House office building, but due to dynamic development, signed an agreement for another 690 sq m. Poznań clients are looking for attractively located, high-quality, economical office buildings which will be able to meet a company's changing needs.”
Stock and supply – exceeding 300,000 sq m of office space
In Q3 2013, because of Malta House, modern office space stock in Poznań increased by 14,700 sq m. As a result, the city’s total supply exceeded the 300,000 mark, currently standing at 310,150 sq m. In terms of supply, Poznań ranks fifth in Poland and fourth among major cities with Krakow, Wrocław and Tri-City occupying the top three positions. In Q1-Q3, 17,100 sq m were delivered to the Poznań market. Additionally, there is 57,000 sq m under construction, with 10,300 sq m scheduled to be commissioned for use this year. A bigger supply is forecast for 2015, when stage one of Business Garden Poznań (41,000 sq m in total) will be delivered to the market. Office projects under construction are located not only in the heart of the city but also in its eastern and western parts, which fosters a decentralization of the Poznań market.
At the end of Q3 2013, the vacancy rate in Poznań remained at a stable (14.3%) level. It should be noted, however, that even today this represents one of the highest vacancy rates among Polish cities. New space scheduled to be delivered in 2014 – 2015 may cause an increase in this index.. RentsCurrently, rents for the best Poznań office projects stand at 14-15 euro/sq m/month.
"The Poznań office market is truly diverse – tenants can choose from a range of well-located projects dependent upon their needs and scale of operations. The city offers both large, flexible offices with expansion options, tailored to foreign investors needs as well as smaller units suitable for local companies. Business services sector companies are still a major driver of Poznań's market development. This is relevant for both new market players (DFDS, Propex Global Company), as well as companies expanding the scale of their operations (Franklin Templeton). Interestingly enough, projects with higher rents located closer to the administrative centre of Poznań are able to attract business services sector tenants. Premium space is gradually finding tenants due to developers’ active and flexible attitude and tenants’ interest in attractive location”, Jakub Sylwestrowicz summarized.
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