Warsaw Offices Are Likely To Become More Expensive

According to the report prepared by JLL, rental rates in the Warsaw office buildings are to become more expensive.

According to the latest report prepared by JLL, rental rates on the European office markets are to be the most expensive in the years 2018/2019. It will be caused by the limited supply of office space. According to the European Office Rental Growth Hotspots 2018 report, the highest increase in rental rates within two years will be recorded in the following cities: Amsterdam, Stuttgart, Stockholm, Munich, Prague, Dublin, Edinburgh, Barcelona, Warsaw or Utrecht.

The highest increase in rental rates in Warsaw will be recorded in the Central Business Area and the Western Center. The current vacancy rate on these areas is maintained at the level of 4.3% in comparison to 10.8% recorded on the entire Warsaw office market.

The currently limited new supply and the increasing building and work costs or prices of plots will generate the increase in rental rates, especially that 2017 was a year of office records in the capital as the absorption totaled as much as 360 000 sq. m in comparison to 275 000 sq. m of new supply delivered to the Warsaw market. This is an interesting signal for investors who search for attractive options for growth of their portfolios – says Tomasz Puch, Head of the Capital Market Department, Office and Warehouse Premises, JLL.

According to the forecasts of JLL, the years 2019/2020 are to stabilize the situation in the city center of Warsaw. However, it is worth pointing out that due to small amount of space under construction in non-central locations of the capital, they may record an increase in rental rates. It will mainly concern new buildings and existing projects that are perfectly located and that characterize with high standard. Importantly, the similar trend may be observed outside the capital. The best examples are Katowice and Poznań which have already recorded the increased rental rates due to low accessibility of new office products. It will not have a negative impact on attractiveness of the Polish office market in the long term, which will still remain competitive due to costs in comparison to the countries of Western Europe – adds Mateusz Polkowski, Head of Market Research and Consultancy Department, JLL.

 


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