Wrocław: a Business-Friendly Environment
Young, educated people do not want to leave Wrocław. They want to stay, live and work here. That’s because Wrocław is simply a great place to live. There’s no better recommendation for companies looking for a place where to open headquarters or regional offices, says Michał Grabikowski, Head of Tenant Representation in Wrocław Office, Cresa Poland.
Which sectors are the catalyst for the rapid growth of the office market in Wrocław, the capital city of Lower Silesia?
IT and SSC sectors lead the way. It’s no longer just about uncomplicated services such as accounting or call centres; we are seeing ever more multinationals shifting their advanced R&D facilities to Wrocław such as Dolby, a global provider of music and cinema audio solutions, which set up its own research centre with state-of-the-art onsite labs and listening rooms, creating a cutting-edge work environment. Wrocław is also a city of start-ups and Wrocław-born firms such as Live Chat and Techland, which are hugely successful overseas.
How is Wrocław better? And why do large firms want to have a presence here?
I talk to investors a lot. They say there’s a business-friendly environment here. They appreciate the robust activity of the Wrocław Agglomeration Development Agency and the speed of obtaining information, permits and decisions. It’s a lot quicker than in many other cities, which facilitates decision-making and doing business.
As access to high-skilled labour remains a top priority, Wrocław is an attractive location for firms setting-up or expanding their businesses. For instance, Credit Agricole, which had previously signed a 15,000 sqm lease at Business Garden, decided to take an extra 10,000 sqm at the same development several months later in what’s this year’s biggest office transaction in Wrocław.
What cities does the capital of Lower Silesia compete with?
Our key competitors in Poland are Krakow and Tricity, but Wrocław - with its intense promotion campaigns - attracts wide publicity in the global arena as well. It’s a very young market where the average age of office buildings is about six. This is appreciated by tenants who prefer Wrocław over Prague, Budapest or even big Western European cities.
It takes more than just efficient public offices and new infrastructure, tenants today keep asking mainly about the labour market…
Wrocław triumphs in the war for talent at the stage of selecting a place to study. Its universities have high standards that attract young people; in addition, Wrocław is simply a good place to live. According to statistics, students here feel more attached to the city compared to those elsewhere and - more often than not - decide to remain here. There’s no better recommendation for companies looking for a place where to open headquarters or regional offices.
Why’s that? Maybe because Wrocław is a friendly and multicultural city with foreign nationals accounting for more than 10% of the BPO workforce. They feel at home here, no matter where they come from. Wrocław is a great place to live and is one of two Polish cities - in addition to Warsaw - included in the “Quality of Living” ranking comprising 231 global cities. This year it came 100th, which is quite a significant achievement.
Which locations attract the strongest occupier interest?
The most sought-after office locations are the vicinity of the Main Railway Station and the city centre. There’s, however, a paucity of vacant office space there, which will probably change in upcoming years with new projects coming onto the market. The most interesting projects are located in Sky Tower’s immediate neighbourhood where Skanska will develop Centrum Południe, a complex of five buildings totalling more than 80,000 sqm of GLA. The first phase is to be completed in 2020. Echo Investment is planning a large office project on an adjacent plot. With the existing office buildings, along Powstańców Śląskich and Swobodna streets, these schemes will form an axis of an office hub with a high concentration of modern office space.
Next year, Skanska will deliver nearly 20,000 sqm of office space at Nowy Targ, located at a junction of Św. Katarzyny and Wita Stwosza streets. Another project is being developed just a kilometre away by Wrocław-based Archicom - City Forum will deliver another 24,000 sqm of modern office space onto the market.
Wrocław’s western district is also expanding, isn’t it?
Yes, it is. It is seeing strong developer activity with more than 100,000 sqm currently under construction and other large-scale projects in the pipeline. Development activity is being driven there, among other things, by a new tram line planned for 2020. The biggest office project in this part of the city and in Wrocław overall is Business Garden. Nearly 80,000 sqm of office space is being built as part of its second phase. Other projects underway nearby include CU Office (23,000 sqm) and Carbon Tower (19,000 sqm). This part of the city is also home to Nokia’s campus.
Office development activity is at its lowest in the Psie Pole district, where there is only one project underway: an industrial-style Bierutowska Park, a former German weapons factory adapted for office use. It is a complex of buildings set among old trees and providing a total of 45,000 sqm of office space.
In mid-2018, Wrocław’s office stock topped one million square metres. Will this growth momentum carry into forthcoming years?
All performance metrics point to an unprecedented boom on the Wrocław office market. In the first half of the year, leasing activity hit 60,000 sqm with new lease transactions having an 80% share of the total take-up, Poland’s highest. Given the volume of office projects that have already broken ground, a further strong performance is anticipated for the upcoming years. Yet, long-term uncertainty remains as rising prices of lands, construction services and building materials are likely to weigh on project viability.