Demand and supply in the office market in the Tri-City area in 2024 were at opposite corners. Leases signed at a level of 116,000 square meters presented one of the highest results in the market history. The weakened activity of developers resulted in the lowest level of new supply in nearly 20 years.
At the end of 2024, the total office resources in the Tri-City area amounted to over 1.07 million square meters. At this time, projects with an area of only 19,000 square meters were completed and put into use, which is the lowest level since 2007.
Current investments by developers are at a historically low level. There are just under 32,000 square meters under construction. The largest upcoming project is Palio Office Park C (Cavatina Holding) with an area of 13,000 square meters.
“The unique character of the Tri-City area is appreciated by tourists, residents, and entrepreneurs alike. In last year’s edition of the fDi European Cities and Regions of the Future 2024 ranking, Pomerania was 7th in the category of creating business-friendly conditions. One of the highest demand figures in the history of this market attests to this. Tenant activity in terms of signed contracts covered over 116,000 square meters of space,” commented Joanna Gomułkiewicz, Associate Director at Knight Frank.
Gdańsk was the most popular among tenants, with 96,000 square meters rented out, and the business services sector generated the highest demand, accounting for 21% of the rented space.
As in other cities, lease transactions were dominated by extensions of expiring contracts, which accounted for approximately 50% of the share. New contracts accounted for 40% of the contract volume, with expansions only 3%.
“The vacancy rate in the Tri-City area at the end of the 4th quarter of 2024 was 12.3%, registering a decrease of 0.2 percentage points compared to the previous quarter and by 0.8 percentage points compared to the same period in 2023. The Tri-City rate was the third-lowest among regional cities, surpassed only by Szczecin and Lublin. It’s worth noting that the rate in this region shows considerable polarization. In Gdansk, the vacancy rate was 9.5%, while in Gdynia and Sopot it was 21.8% and 19.3% respectively. The high level of demand and the slowdown in new supply pace will result in further lowering the vacancy rate in the coming years,” added Michał Kusy, Junior Consultant, Research at Knight Frank.
Starting rents in the Tri-City area at the end of Q4 2024 recorded a slight increase, ranging from 11.00 to 16.00 EUR/sq.m./month, although in new buildings in prestigious locations they may reach higher levels. Operations charges remained at a stable level usually ranging from 17.00 to 30.00 PLN/sq.m./month.
Source: https://ceo.com.pl/trojmiejski-rynek-biurowy-2024-historyczny-popyt-kontra-rekordowo-niska-podaz-19244
