Tricity, comprising Gdansk, Gdynia and Sopot, is the third-largest regional office market in Poland. Its total office stock has just surpassed the one million sq m mark, reveals real estate advisory firm Savills, which has recently opened its office in the Pomerania region. Tricity also saw a rebound in leasing activity in Q1 2022, with office take-up up by almost a half since the end of last year.
According to Savills latest report “Spotlight: Office Market in Tricity”, 373,500 sq m of new office space was delivered onto the Tricity market in the last five years. With over 755,000 sq m of office space, Gdansk retains the top spot as the region’s largest city, accounting for more than three quarters of Tricity’s total stock. It is followed by Gdynia, with over 200,000 sq m, and Sopot, which contains just over 35,000 sq m.
Tricity’s office market is relatively young. Approximately 38% of its stock is aged less than five years whilst buildings more than 10 years old make up just 30% of its total.
“Of all the business districts in Tricity, Młode Miasto in Gdansk is growing in importance and is expected to attract a substantial proportion of development activity in the near future. At the end of the first quarter, Pomerania’s development pipeline comprised ten office projects with a total area of around 87,600 sq m, over half of which was underway in Gdansk,” comments Piotr Skuza, Associate Director, Regional Manager, Savills Gdansk.
Savills data shows that with 22,500 sq m of office space leased in the Tricity conurbation in the first three months of 2022, take-up was 58% above the total posted in the last quarter of 2021. Demand was largely driven by the IT and business services sectors, which accounted for over half of the leasing volume.
“Tricity has the fourth-largest concentration of business services centres in Poland. Its business services sector already comprises 181 companies employing close to 35,000 various specialists. It has maintained a strong growth momentum since 2016, expanding by 50% over the years. Investors seeking to operate in Pomerania have indicated in talking to us that the choice of a suitable office is one of their first decisions. What’s more, companies present in Tricity are perfectly aware that in order to recruit and retain top talent they need to provide a modern office environment. Being the best place to live in Poland for the quality of life, Tricity wants to be recognized as a role model in this category as well,” says Marcin Grzegory,Deputy Director, Invest in Pomerania.
According to Savills data, Tricity’s vacancy rate stood at 14.3% at the end of March 2022, up by 2.1 pp quarter-on-quarter. Prime office rents in the first quarter of 2022 remained in the range of EUR 12-14.75 per sq m per month.
Despite rising construction costs and high inflation, headline rents are expected to hold firm in Tricity in the near future, says Savills, largely due to the region’s high vacancy rate and strong development pipeline. The appetite for increasing rental rates is likely to be dampened by competition, especially among the landlords of new build office space which will be gradually absorbed by tenants.