According to the recent reports on the Katowice office market, the interest of companies in office spaces in the City is still growing and the vacancy rate declines at the same time. Taking into account the situation, real estate market specialists urge developers to be more active on the office market of Katowice.
In 2010, more than 44 600 sq. meters of modern A class office space was put into use in the City provoking vacancy rate of 17%. As a consequence, there was limited developers activity in 2011 where only 8 400 sq. meters of office space were delivered. It is expected that about 20 000 sq. meters of office space will be completed in Katowice by the end of 2012.
At the same time, the market has been recording a high number of lease agreements amounting to approximately 37 000 sq. meters in 2011 and another 17 700 sq. meters in the first half of this year.
As a result, the vacancy rate declined to 9,9% at the end of H1 2012. Jones Lang LaSalle analysts expect Katowice may face a supply gap in 2013 which might drive further downward pressure on the vacancy rate and some problems for companies that will be looking for a large-sized office space within one building or office park.
“Hypothetically speaking, it is possible the number of available modern office space in Katowice will be insufficient next year. The tenants’ activity is still quite high. If the positive movement continues, the buildings offering some vacant spaces at the moment might be fully occupied in 2013” – Rafał Oprocha, associate director at Jones Lang LaSalle, said during an outsourcing conference that took place in Katowice on 19th of September.
Occupancy rate in the Katowice biggest office location is now reaching the level of 100 percent – Green Park (100%), Chorzowska 50 (99%), Euro-Centrum (98%), Altus (95%), Millenium Plaza (90%). Some larger units of space are still available in Reinhold Center (70%), Atrium (70%), Francuska Office Center (65%) and in the newly delivered Goeppert-Meyer building of GPP Business Park.
Additionally, there are only two office facilities under construction at the moment – Nowe Katowickie Centrum Biznesu (13 000 sq. meters) and the passive building of Euro-Centrum (6 335 sq. meters) – both to be delivered in the months to come.
According to Jones Lang LaSalle, there is a number of planned office developments ready to be kicked-off (e.g. Neinver office building, Silesia Business Park). Though, while the developers are waiting for pre-let agreements to commence the construction work, occupiers’ inquiries are focused on existing and under construction space. That means the planned projects are being postponed time after time in most cases.
“Considering the availability of modern office space and growing demand on tenant’s side, we encourage developers to think over the situation on this office market and to be ahead of time. Katowice may become very popular at a certain moment” – Oprocha said. “The similar situation was in Kraków where the supply gap had caused that investors started to be interested in other cities. The great example is Kraków’s Tele-Fonika which opens a new office in Katowice. The City stands a great chance to fill up the gap between Kraków and Wrocław. Katowice can hit the big time.”