More and more companies are either relocating their offices to Tricity or looking to open a branch there. Gdansk and Gdynia, the two key cities of the Tricity metropolitan area, have recently welcomed new US and European firms. Demand for office space is also being reported in the region by the booming shared services and logistics sectors, says Kaja Karbowska, an advisor specializing at Newmark Polska in the Tricity office and industrial markets.
More than 50,000 sqm of modern office space came on stream in the first half of this year, pushing Tricity’s total office stock beyond the one million square metre mark.
Office projects make cities
“Both the new supply and the development pipeline have recently become increasingly multifunctional. In Gdynia, Vastint Polska is developing the second phase of its Waterfront complex tucked between Waszyngtona and Skwer Kościuszki streets. In addition to office buildings, there are also plans for residential developments, many service outlets, a hotel, conference space, a spa and public buildings including a cinema,” says Kaja Karbowska.
“As projects such as Waterfront are attracting tenants, developers are being increasingly driven to commence engaging, city-forming projects. Having an office in a unique complex is frequently an asset for a company and a magnet attracting talent. Mixed-use complexes are also able to address employee needs and improve work-life balance. Employees don’t like to waste time, especially post-lockdown, and would like to have everything at hand – not only a retail store or a kindergarten, but also trendy eateries or a variety of cultural places. They are not too keen on long commutes either, best illustrated by the popularity of Garnizon, another very interesting project underway. You can live and work within this new housing estate as residential buildings are being built next to office, service and retail facilities,” says the expert of Newmark Polska, who closely tracks city-forming projects. “Tricity still has many sites suitable for such developments,” she adds.
New office buildings emerge along railway lines
Gdansk is the largest office market in Tricity, containing over 70% of the region’s total office stock. Office buildings have been predominantly built in Przymorze and Oliwa, but recently there has been a growing synergy between office projects and former shipyard areas.
“Proximity to Fast Municipal Railway (SKM) or Pomeranian Metropolitan Railway (PKM) stations has traditionally been high on the agenda as most employees prefer to commute by public transport due to relatively low parking ratios,” says Kaja Karbowska. “Examples of such projects include Airport City Gdansk Alfa, which was completed earlier this year close to a PKM station, and Format, delivered near an SKM station in Gdansk, which will be followed by Punkt and another phase of the Palio office complex. Investor focus in Gdynia is on locations between SKM stations: Gdynia Redłowo and Wzgórze Św. Maksymiliana, where K2 was delivered this year and developers have secured land for more projects.”
Happy cities attract talent
Happy people also attract new tenants and office projects. In the list of the happiest Polish cities, recently published by Otodom.pl, Gdynia was ranked number one while Gdansk came second. They are valued for availability of retail stores in the nearest neighbourhood, proximity to nature, good public transport, safety, and a broad range of entertainment and leisure options. According to Kaja Karbowska, the high quality of life in Tricity also attracts professionals who want to live and work there. “A strong trend that we have seen for quite some time has been the migration of talent to Tricity, especially from Warsaw and the Silesian Conurbation. IT specialists lead the way. Another magnet attracting talent to Tricity is the presence of many global companies such as Bayer and Amazon and many Scandinavian firms offering development opportunities to employees with international language proficiencies, especially those with a command of German or Scandinavian languages,” says Kaja Karbowska.
Demand for offices in Tricity comes from logistics and shared services
The largest employers in Gdansk, Gdynia and Sopot are shared services centres focusing on accounting, financial, IT and call centre services. Tricity currently has over 180 shared services centres with a combined headcount of around 35,000. “On account of Tricity’s coastal location, our clients increasingly include logistics companies reporting requirements for warehouses and office space for their headquarters and branches. Drawing on our advisors’ experience in the office and industrial markets, we offer tenants comprehensive support and advice,” says Kaja Karbowska.
The largest transaction in the Tricity office market in the year to date was the renewal of a confidential tenant’s lease for 5,400 sqm in Olivia Star, while the biggest new leases saw SK Hynix lease over 2,800 sqm in Airport City Gdansk Alpha and C.Hartwig take close to 2,600 sqm in K2 in Gdynia.
The market set to regain balance
The Tricity office market is growing at a healthy steady pace. “The outlook is positive: rental growth has been modest despite rising construction costs. Rents currently stand at around 10 euros per square metre of class B office space and at 14,5 euros on average in new class A office buildings. Most companies have returned to the office, having adopted in-office or hybrid work arrangements. New market players are emerging while companies that have long been present in Tricity continue to grow,” concludes Kaja Karbowska.