Łódź, the third largest city in Poland in terms of population and the seventh in the CEE region (almost 700,000 inhabitants), is one of the most important economic hubs in the country. The city is known as the centre of BSS sector and for its dynamic office developments, and also as a perfect location for capital investments – both institutional funds and private equity. The case of the FUZJA mixed-use project developed by Echo proves it.
Today, Łódź is an important and fast developing urban center. Strategically located, 120 km south-west of Warsaw, on a motorway junction, it provides quick access to other large cities such as Poznan, Tricity, Wrocław and Katowice. Municipal investments (revitalization of quarters and tenement houses), central investments (new railway station, a tunnel connecting the two largest stations) and private investments (mixed-use projects, new office and residential buildings) have transformed the city, giving a new impulse to development and making it increasingly attractive for current and new residents.
The key sectors of the Łódź economy are manufacturing, warehouses/logistics and modern business services (IT, SSC, BPO, R&D). The latter sector, which has been developing rapidly in Łódź since 2009, is the main driving force behind developers’ investments in the office segment. Over the past 13 years, service centers and offices have been built by Nordea, Infosys, Fujitsu, Philips, Ericsson, Barry Callebaut, Whirlpool, Orange, GFT, ABB, Accenture, TomTom, Bosch-Siemens, UPS, Commerzbank, Harman / JBL, EY, DXC, MakoLab, Asseco, Comarch, Bluerank, Clariant, Cybercom and Airbus Helicopters. Recently (2021), several new companies have set up in Łódź, including from Belarus and recently from Ukraine.
In total, c.a. 90 companies from the BSS sector operate in Łódź. The total employment in the sector has reached approx. 30,000 people.
As a result, a modern office market has developed. It currently comprises 583,000 sq m of modern office space, and an additional 88,800 sq m is under construction, half of which to be delivered in 2022. The demand for offices in the last 7 years has been at the average level of 55,000 sq m per year (in 2021: 51,500 sq m).
All the above-mentioned factors make Łódź an attractive location for capital investors – institutional ones and private equity – looking for assets that ensure fair yields and a stable, predictable and promising market. The largest players who have invested in Łódź are: Union Investment (Manufaktura), Globalworth (Green Horizon), Niam (Nowa Fabryczna), as well as Invesco, Savills Investment Fund, Redefine, HendersonPark, Benson Elliot and LCN Capital Partners.
In 2021, the German fund KGALL announced their decision to purchase the office part of the mixed-use project FUZJA, implemented by Echo Investment on an area of approx. 7 ha in the center of Łódź at Tymienieckiego St-Milionowa St quarter. The tenant in the office part of Fuzja (approx. 25,000 sq m) is a leading global IT player, Fujitsu Technology Solutions (16,300 sq m). Colliers was involved in both the lease and sale transactions.
The city of Łódź is a rising star on the Polish capital investment market. We invite you to download our report and learn about what Łódź offers to investors!
