The supply of new office space in Poland’s main regional markets will be 128,500 sqm in 2024 and 153,500 sqm in 2025, compared to 280,000 sqm last year, JLL estimates.
The year 2023 in Poland’s main regional markets was a time for everyone to update their strategies. Developers delivered a total of around 280,000 sqm of modern office space, which is still high for the post-pandemic era. However, the situation will change dramatically between 2024 and 2025, when forecasts of new supply of around 128,500 m2 in 2024 and 153,500 m2 in 2025 will be realised – this will be more than two-thirds less than in the years before 2020. Projects under construction, as of December 2023, had a total of more than 280,000 m2 of planned space. This is a natural reaction on the part of many developers, who have started to revise their plans in relation to tenant demand in the market and oversupply in many Polish cities, JLL reported.
At the end of 2023, no new construction has started in regional cities – developers are focusing on investments that have already started. Construction activity is concentrated in the markets of Wrocław, Katowice and the Tri-City, where 55,000 sqm, 48,700 sqm and 47,300 sqm were under construction respectively, it was also stated.
“The high new supply in the regional markets influenced a further increase in vacancy. In December 2023, the vacancy rate totalled 17.5 per cent, although in selected cities it was significantly higher, including Katowice (21.5 per cent), Łódź (20.3 per cent) and Kraków (19.8 per cent). The market will need a minimum of three years to absorb this space and return to a greater equilibrium. However, this does not mean that even in a worse market environment, there are no office investments that have been successful in terms of commercialisation,” said Head of Research & Consultancy Mateusz Polkowski.
Source: JLL and ISBnews
