Lublin Info Centre

Office market in Lublin in September 2020

The disruption caused by the COVID-19 pandemic has seen a vast majority of economic sectors change the way businesses operate, including the ways employees work. Effects of the global lockdown were felt also on office markets across the whole of Poland, with Lublin being no exception. Let’s take a look at the current situation on the market of modern offices in the city.

Over the past decade, Lublin has outperformed many of the larger Polish cities. Growth has been driven by a well-educated population, robust international student community as well as a great number of infrastructural investments. This has been supported by the city establishing itself as a destination that offers a high quality of life and work, also thanks to a rapidly growing sector of business services that cannot thrive without proper office spaces. As of today, Lublin’s total supply of Grade A and B offices stands at 207,874 sqm in 52 buildings across the city, and Grade A space accounts for 52% of Lublin’s offices. According to Investor Relations Office there is now (September 2020) just 23,125 of Grade A and B office supply in the market, putting the vacancy rate at 11%, its second-lowest level since January 2017.

Capgemini, represented by Cushman & Wakefield, secured the largest deal this year. The company agreed to take 900 sqm of Grade A space at CZ Office Park A. Unfortunately, a number of new and expansion deals were delayed or cancelled due to the uncertainty caused by the pandemic. In particular, we’ve seen some occupiers, who are currently in serviced space, postponed their moves expecting that shortly more certainty is brought back into the market.

Lublin currently has three developments under construction, all three due to complete in 2021. The first stage of CZ Office Park D of 7,000 sqm will be the first one to be ready for occupation in Q1 2021, just before Wojciechowska 9A scheme which will provide 6,700 sqm of Grade A space and G7 Inter Office that will be completed in Q2 2021 offering around 16,000 sqm to its tenants. Then, in Q3 2021 Lublin will see the completion of the second stage of CZ Office Park D featuring additional 9,000 sqm. The development pipeline is positive news for not only for new investors entering the city, but also Lublin-based businesses that grow and need more space. Occupiers know that a successful way to attract and retain talent is to have a high-quality office in a desirable location, that offers convenience through local amenities and on-site facilities. Businesses around the world were forced to adopt remote working almost overnight as the COVID-19 broke out. Currently, organisations are embracing a hybrid model of remote and in-office working. The lockdown has shown that digital collaboration can be just as productive as face-to-face meetings, but human interaction is what’s lacking in the new reality. It seems that in the long-term technology allowing for new working methods will be more likely to complement not replace the need for the physical workplace, providing the room for growth of the office market. However, there are a few companies in Lublin that due to pandemic have altered the way of working and, no longer needing spacious offices, are eager to sublease their spaces.

The approaching completion of the three new developments presents high prospects for 2021 take-up, taking the Lublin’s total supply to almost 250,000 sqm. With the planned improvements in connectivity spearheaded by the completion of S17 and S19 express roads to Warsaw and Rzeszów respectively, the city will become an increasingly more attractive location for Warsaw- and Cracow-based companies looking for alternative places for growth. Despite the COVID-19 disruption, the city’s long-term prospects are really strong.

The pictures below present the offices in the construction pipeline:

G7 Inter Office