The First Million is Just Round the Corner

Tricity is one of Poland’s fastest-growing office markets. More than 230,000 sqm is in the pipeline with Skanska and Polski Holding Nieruchomości breaking ground on their first projects here, says Michał Rafałowicz, Head for the Pomeranian Region, Cresa Poland.

In the first quarter of 2019, Tricity’s vacancy rate stood at 5.4%, the lowest of Poland’s eight core regional city office markets. What pushed the region’s vacancies down to such a low?

Tricity’s vacancy rate has been on a downward path since the beginning of 2016, largely due to robust occupier demand for office space. Tricity is one of Poland’s fastest-growing office markets, offering more than 790,000 sqm of office space (596,000 sqm in Gdansk, 160,000 sqm in Gdynia and 32,000 sqm in Sopot). Taking advantage of the growing demand, developers have broken ground on new projects that are expected to provide more than 230,000 sqm in the next three years, bringing the region’s total office stock up to over 1 million sqm.

Who is building in Tricity?

The Tricity office market has been dominated so far by local developers, but this is also changing. Last autumn, Skanska announced construction of its first office building in Tricity. Its Wave complex will comprise two 14-storey buildings in Gdansk Oliwa’s business hub. The first building with an area of 24,700 sqm is scheduled to be completed in the second quarter of 2020. Another large project will be developed by PHN in Gdynia: Marina Office, which will provide a total of 27,000 sqm in three five-storey buildings. It is expected to be delivered in the first quarter of 2022.

Local developers also remain very active. Gdynia-based 3T Office Park Sp. z o.o. has launched its largest office project in Gdynia: 3T Office Park, which will comprise three office towers with a total leasable area of 38,400 sqm and will come onto the market in the first half of 2021. In addition, Neon, the last building of the Alchemia complex developed by Torus in Gdansk Oliwa is also underway. It will offer 33,700 sqm and is scheduled to be delivered this year.

Will large developers entering Tricity substantially change the market landscape and rental rates?


Today, it is difficult to speculate what effect the presence of large market players will have on Tricity. Large companies pursue business strategies that tend to differ from those of local developers who invest long-term. However, to find office tenants more quickly, they are very likely to offer large lease incentives which will push effective rents down. They can do it, but don’t have to. I think that the first two or three large leases will show how the market will be evolving. First and foremost, however, new market players will mean a new quality and more choice for tenants. New office projects are also likely to push the region’s vacancy rate up to at least 8%, helping the market regain a healthy demand-supply balance.

What are the key occupier sectors on Tricity’s office market?


According to last year’s data, the strongest demand came from such sectors as IT, telecommunications, retail and financial services. IT has always been strong in Tricity. For instance, Gdansk has been home for many years to Intel, a global leader in modern technologies, which has been attracting other IT companies to the region such as Nordea and Arrow. What’s more, Amazon has been expanding its R&D centre in Gdansk for years, the only such facility in Poland. Logistics operators, maritime trading and seaport industry companies are also increasing their presence on the office market, with Scandinavian firms such as Arla Foods and Danfoss also opening offices in Tricity.

Benefiting from its buoyant economic growth and good quality of life, Tricity features prominently on the radar of companies planning to enter Poland via other locations than Warsaw for a variety of reasons.

Michal_Rafalowicz


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