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Companies want to grow in Katowice. A historical fall in office vacancies

Summary of the Katowice office market at the end of 2018.
At the end of 2018, the total office stock of Katowice, Poland’s fifth largest office market, stood at 519,300 sq m. Last year’s new supply amounted to 50,800 sq m (+218% y/y) delivered across ten office projects, the biggest completions being .KTW (18,200 sq m), Silesia Business Park IV (10,700 sq m) and GPP Business Park IV – Bloch (7,500 sq m). Another 52,000 sq m of office space is expected to be constructed at seven new office schemes in the coming 12 months, say experts of global real estate services firm Cushman & Wakefield.

Katowice witnessed a historical fall in office vacancy rates in 2018. The downward trend is likely to intensify further due to robust occupier demand for Class A office space in central locations. Established tenants continue to look for expansion opportunities, driven by strong growth powered largely by easy access to talents in this metropolis with a population of over two million. We expect several major transactions to close in 2019, which will confirm the growing importance of Katowice on the office market of Poland,” says Tomasz Dyba, Negotiator, Office Agency, Cushman & Wakefield.

Office take-up hit 38 200 sq m in Katowice in 2018, up by 24% on 2017’s level, but down by 9% on the five-year average for 2013-2017. The largest transactions were signed by Fujitsu Technology Solutions at .KTW (6,300 sq m), Perform Media at Business Park II building A4 (3,100 sq m) and Farmacol (2,100 sq m).


Building

Tenant

Sq m

Lease type

.KTW I

Fujitsu Technology Solutions Sp. z o.o.

6,300

Pre-let

A4 Business Park II

Perform Media

3,100

New lease

Katowice Business Point

Confidential

2,200

New lease

Farmacol

Farmacol

2,100

Owner occupier

.KTW I

Teleperformance

1,500

Pre-let

Silesia Business Park IV

Confidential

1,500

Pre-let

.KTW I

TDJ

1,500

Owner occupier

Mikołowska 51

ITEO

1,300

Expansion


In 2018, Katowice’s office vacancy rate stood at 8.8% (equating to 45,700 sq m), which represented a 2.5 pp decrease compared with 2017. This also pushed net absorption up by 118% on 2017’s level to 57,100 sq m at the end of last year.

Prime office rental rates amounted to EUR 13.75/sq m/month in 2018. Average prime rents are expected to pick up in the coming quarters following the local market entries of such developers as Cavatina, GTC, Trigranit and Vastint.