The balance on the market will shift due to the influence of high supply

According to the report of DTZ Skyline Tracker, in the next three years Warsaw's office market will gain about 820 000 sqm of space.

The high value of new supply in the coming years will influence the balance of power present on the Warsaw's office market, strengthening the position of the leaseholders. According to the DTZ Skyline Tracker's report, currently under construction is nearly 600 000 sqm and in the next three years the market may gain even 820 000 sqm. In comparison with the record breaking level of constructed space in the Autumn of 2012, this result is a decrease by 19 percent. The most number of offices is currently being built in three zones: Centrum, Południe Górne and Południowy Zachód (giving a total of 400 000 sqm).


Since the beginning of the year, the Capitol's market gained over 290 000 sqm of modern office space. In overall, in 2013 the supply may exceed 300 000 sqm, which will be the highest value noted since 2001. According to the experts from DTZ, such high level will remain also in the next year.


After the two years of high volume of supply, the slowdown of the dynamics of the provided space is predicted, as it will stay on the level of 200 000 sqm. Predictions base on the smaller amount of space currently under construction, especially on the earlier stages of building.


A record breaking amount of office space, which will be put into operation in the next few years will significantly change the position of both the leaseholders and the property owners. For the leaseholders it means a higher accessibility of office space, strengthening of their negotiations position and the decrease in the costs of renting an office - comments Kamila Wykrota, Head of Analysis and Counseling Department in DTZ. On the other hand, the office buildings owners will have to face the growing level of vacancies, pressure connected with falling rent rates and the lengthening of the renting process of new space. DTZ also predicts that more and more buildings will have to be modernized to successfully compete with new projects - she adds.


Experts point out, that the popularity of sectors located outside the center will grow. The majority of new space planned for the years 2013 - 2016 will be located in the city's suburbs or in the two biggest zones outside the center, i.e. Południe Górne and Południowy Zachód. In these districts of the city, an overall supply of the offices may reach even up to 500 000 sqm, which is 60 percent of a total planned space of the volume.


Full report is available in the PDF file below.

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