Office Real Estate Market 2014 in Warsaw

Warsaw Research Forum and consulting company CBR published reports which resume last year real estate market of offices in Warsaw. Can we talk about tenant market yet?

Supply

 

At the end of the 2014 year the whole supply of progressive office space in Warsaw was about 4 400 000 sq.m. During the year 276 900 sq.m. of office space were put in use. Most of it (about 70%) is located outside the center of city, main in south-west area and suburbs of center.

Among the biggest last year investment should be mentioned first stage of Gdanski Business Center (47 194 sq.m.), Eurocentrum Office Complex I (38 700 sq.m.) and also B building, which belong to Warsaw Spire complex (20 000 sq.m.)

 

In present time there are building above 786 000 sq.m. office area, most of it is located in the Center next to second subway line and at the Wola.

 

Indicator of new buildings

 

First time for two years in Warsaw level of amount formed buildings decrease in quarter of the year and is on level 13,3%. Though compare to level of new buildings at the end of 2013 (11,7%) it is increasing.

CBR anticipate that amount of new buildings will be increasing until half of 2016. It will be caused by big amount of office space built as a result of speculation. Increasing level of new buildings should last at least to half of 2016.

 

Transaction

 

Level of registered transaction in 2014 is 612 000 sq.m. It is 6% less than year before. The most of office space was rented in two main areas besides center of city: South Top (183 300 sq.m.) and South West (137 900 sq.m.)

First time in years level of rented office space in Warsaw was lower than years before, it was caused by low activity of tenant during crisis in 2009. We anticipate that activity of tenant will rise in next months. Companies see opportunity on the market, so they are looking for offices with higher quality and in attractive localization. To interest them offers have to include their developing skills and be included in business goal of companies, says Joanna Mroczek head manager of research and marketing in CBR.

The biggest activity of companies is seen in BPO/SSC sector, this dynamic development is noticed for couple years. In Warsaw there is high level of costs per employee, despite this there is wide choice of localization and beneficial rent besides the center of the city. Absorption of new office space is the biggest challenge for Warsaw real estate market of offices. We noticed development of Tech sector companies, public institution and health services. Because of rising need of office space for BPO, finance and insurance sector, we anticipate that there will be a new trend in planning an office. Consolidation of office space will be one of the biggest change and it will affect the real estate market of offices in Warsaw admit Joanna Mroczek

 

 

WFR make a point that on the Polish real estate of offices there is a tendency to renegotiate and renew rent agreement. This phenomenon refer to 31% of agreement made last year. New agreement and expansions were 54% of all contracts and pre-let transaction was 15% of all settlement.

Among the biggest transaction of 2014 there are couple contracts worth of mention - Raiffeisen Bank in Prime Corporate Center rented 19 500 sq.m., renegotiation for 17 500 sq.m. in Poleczki Business Park by ARiMR and settlement PKP Group for about 15 00 sq.m. in new building West Station which is forming near West Station.

 

Rents

 

In the center of Warsaw transaction rent decrease to 25 euro per sq.m. per month. In area besides the center of the city rents are at the stage of 14-15,5 euro per sq.m. per month. In few years in the center there will be big amount of office space, many new buildings are during building or are planning to be. Because of that there are anticipation that rents for office space will decrease in that area. This situation may mean that there will be a wider group of renting companies which can afford offices in the Srodmieście in Warsaw.


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Tags: CBRE DTZ Warszawa
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