Cushman & Wakefield has published a summary of the first quarter of 2018 on Poland’s regional office markets. Following the record-breaking performance in 2017, the total office stock of regional cities rose by 3% q/q by the end of Q1 2018 to 4.5 million sqm. The average vacancy rate for the regional markets was down 0.6 p.p. at 9.3%. The largest concentration of development activity is in Wrocław and Krakow.

Digitisation and automation are transforming the property business, not just in Western Europe but in CEE markets as well. 200 people came together at the second Prague Property Forum 2018, a conference organised by Property Forum and RICS, where an international group of speakers discussed the effects of technology on the property business.

Immofinanz doubled the results of operations to €35.5 million in the first quarter of 2018 (Q1 2017: €17.8 million). Rental income rose by 3.3% to €59.0 million. The results of asset management increased by a sound 14.1% to €45.0 million following a substantial reduction in property expenses. Both the results of property sales and the results of property development turned clearly positive: the results of property sales improved to €3.5 million (€-6.0 million) and the results of property development to €1.8 million (€-5.8 million).

The key catalyst behind the further growth of Poland’s regional office markets is the BSS sector, which is increasingly expanding into smaller cities as tenants continue looking for attractive alternatives outside Warsaw. This is benefiting such locations as Krakow, Wrocław and Tricity and all the regional markets are seeing multiple modern office projects underway in response to the growing occupier demand.

Nordea, Infosys, Fujitsu and Harman opened offices in Łódź a long time ago. Other firms are now following in their footsteps. Commerz Systems recently announced its entry into the Łódź market, says Marta Pyziak, Head of the Łódź Office of Cresa Poland.

According to JLL, Prague is still the largest sub-market in the Czech Republic, but a great deal of attention is also being paid to the border areas. In Q1 2018, almost 25% of all new industrial supply in the first quarter was delivered in the Karlovy Vary region for example. These include Panattoni Park Cheb and CTPark Aš, which together brought more than 50,000 sqm of new warehouse space to potential tenants. In another part of Northwest Bohemia, the Ústí nad Labem region, many projects have also been completed. The region represented 20% of the total completed industrial space and the third most active region by new premises delivered.

Preliminary data has revealed an increase in shopping centre footfall on Thursdays, Fridays and Mondays, and a decrease on Saturdays. Cushman & Wakefield presented a summary of the first quarter of 2018 on the Polish retail market in its latest report.

The Polish industrial market just closed its best start to the year to date with demand hitting around 1.1 million sqm. Furthermore, 1.8 million sqm of warehouse space is currently under construction. JLL summarised the condition of the industrial and warehouse market in Poland at the end of Q1 2018.

The CEE hotel market experienced rapid growth in the last three years both in terms of hotel performance and transaction volume due to the dynamically expanding tourism industry. Within the region, the Budapest hotel market has seen exceptional growth, as its RevPAR (revenue per available room) growth outpaced the key regional capital cities, according to Colliers International's latest hotel market study.

Whilst Prague 4 is the largest market, over the next two years, most of the new supply will be delivered to Prague 8. In perspective, it could overtake Prague 1 by market share and become the third largest office submarket in the capital. In 2018 and 2019, almost 27% of new offices that are currently under construction will be completed in Prague 8. The largest of the planned projects is Palmovka Open Park, thanks to which office space in Prague 8 will expand by almost 25,000 sqm at the end of Q2 2018. Regarding the intensity of construction, Prague 4 is in second place with 22% of the offices under construction. The third place belongs to Prague 5, where 19% of new construction will be completed.