2019 – a year of record supply on the commercial real estate market

What to wish investors in 2020? That he would be at least as successful as the previous one. The summaries of 2019 leave no doubt – it was accompanied by a record boom in commercial real estate markets.

 

Forecasts made at the end of 2018 did not disappoint. Poland is still the most attractive investment market in Central and Eastern Europe, which translates into the volume of transactions on commercial real estate markets. In 2019, it reached a record high of 7.6 billion euros, thus beating 5% record from the previous year. Half of all transactions were recorded on the office market, which results from the constant interest in locating modern business service centers (BPO / SSC) in our country. The value of the transaction volume on this market in 2019 reached a result of nearly 3.8 billion euros and is a result of 37 percent. larger than in the previous year.

 

Regions are catching up with the capital

Although investors are constantly focusing their attention on Warsaw, where the volume of transactions amounted to as much as EUR 2.4 billion and as many as 165 thousand. m2 of new, high-class office space (with an indicator 30% lower than in 2018), smaller towns and more distant regions of the country also achieve a surprisingly high result. In total, outside Warsaw, as many as 547 m2 of new offices were created in 2019, i.e. almost four times as much as in Warsaw. This increase meant that 2019 closed with the total volume of office space in regional cities in the amount of over 5.6 million m2, which is an indicator of 14 percent. higher than at the end of 2018Among cities outside the capital with the largest amount of available office space, Krakow invariably reigns. His unwavering position as a leader in the BPO / SSC sector and the constant attractiveness in the eyes of foreign investors means that he is constantly adding new office space in attractive locations. Currently, the volume of office space in Krakow is almost 1.5 million m2. Wrocław is just behind Krakow with the result of 1.2 million m2 and the Tri-City with almost 900 thousand. m2 of modern office space. By almost 20 percent compared to the previous year, the volume of office space in Poznań increased in 2019, and by 13% in Łódź and Szczecin.

 

Better, comfortable and convenient

The past year also did not record any decrease in interest in the lease of office space. The employee’s market, ever-increasing demands and expectations also regarding the workplace and its surroundings and comfort mean that tenants are eager to rent modern, comfortable and equipped with a variety of amenities office space. In Warsaw alone, a record was set in 2019 because over 880 thousand were rented. m2. However, the situation is not worse in other parts of the country, where the volume of rented office space is catching up with this in Warsaw. In 2019, only eight major regional cities rented 692,000. m2 of office space. Most, as much as 266,000. m2 (26% more than in 2018) – of course – in Krakow, but Wrocław is not far behind. Tenants took up as many as 123,000 there in 2019. m2. Not much less, because over 100,000 m2 was rented in the Tri-City. In turn, the vacancy rate at the end of 2019 was 7.8 percent. in Warsaw, 13 percent in Wrocław and 11 percent each in Kraków, Poznań and Łódź. In Warsaw, on the other hand, rents increased by 7 percent, which puts it in the top five European cities with the highest rent increases – just after Lisbon, Berlin, Amsterdam and Hamburg.

 

The retail market continues to flourish

Despite the visible very high saturation of retail space in most Polish large cities, 2019 was, however, a very good year also on commercial markets. Although no such values ​​have been recorded as in previous years, the total value of investments here amounted to EUR 1.9 billion. In large cities, mixed-use centers that combine shopping, office entertainment and catering functions are most attractive to investors, and shopping parks and outlet centers are also popular. Shopping centers still play a significant role in smaller towns and this is where the greatest opportunities for their development are seen in subsequent periods.

 

To sell, you must first store

Record supply in 2019 was also recorded on warehouse markets. The volume of total modern warehouse space in Poland at the end of the year was 18.5 million m2, of which 2.7 million were new warehouse halls, completed in the past year. This result is also a record indicator in terms of the size of relative to previous years. At the end of the year, 1.9 million m2 of warehouse space was still under construction. Poland is an attractive market for the logistics sector and third services. The largest warehouse space, 4.3 million sq m, is located in Warsaw. Central Poland is the fastest-growing warehouse market, where over 600,000 were created last year. m2, which is the highest result among all regions. Upper Silesia and Wrocław are still developing dynamically. The record was also broken in the amount of rented warehouse space, because in 2019 it was rented by 2 percent. more warehouses than in the previous year (over 4.1 million m2). The year 2020 promises to be no less interesting.

We keep our fingers crossed for new investments and transactions in all markets.