In 2013, over 300,000 sq m of new office space will be delivered to the Warsaw market – says CBRE's latest report. This is a record amount, as in the past higher volumes of office space delivery were noted only in 1998 and 2000.
In Q1 2013, office stock increased by 76,200 sq m. As a result, there is over 3.9 million sq m of office space in the capital of Poland. The most recent completions are Konstruktorska Business Centre (48,000 sq m) and Ambassador (15,600 sq m). Both are situated in the Mokotów district. The city has turned into a dynamic construction site, as there is currently around 590,000 sq m of office space under construction there.
CBRE underscores high tenant activity. In Q1 2013, lease contracts for 155,000 sq m were signed, of which renewals were 37% and pre-lets accounted for 19% of the total.
Cost reductions seem to be a major demand driver in the Warsaw office market, with a number of companies seeking to consolidate and searching for new, more flexible headquarters at a lower rent. Office tenants now look with a keener eye at city centre fringe locations due to a more diversified offer and affordable rental conditions. However, non-central locations still continue to attract most tenants. - observed Konrad Heidinger, Consultant, Research & Consultancy, CBRE.
According to the CBRE experts, by the end of 2013 the office vacancy rate will exceed considerably 10%. At the end of the first quarter 2013, the rate stood at 9.9%. It will have an impact particularly on rents, which can be even 30% lower than the headline rates. Currently, the average office rents in Warsaw are around EUR 14 /sq m per month in non-central locations and around EUR 20 /sq m per month in centrally located buildings.
Below you will find a full version of the report in a PDF file.
Download PDF