The Warsaw market is still attractive for tenants. It is characterized by a great surplus which has an impact on the decrease in rents and such a direction will be maintained in the following 3-4 years. We may expect the raising of levels which have not been recorded on the Warsaw market for a very long time. It depends on a place but I think that tenants will be able to find offices for the price below 10 euro per one sq. m in the cheapest locations – says Łukasz Jędrychowski, expert for commercial properties in Nuvalu Poland.
Jędrychowski points out that the office market in the capital may be definitely called a tenant's market. As a consequence of an increasing supply for two years, the decrease in rates of rents is quite noticeable. It is an unusual situation against other European capitals where tenants have many difficulties in finding premises, especially in such profitable conditions.
At present, the price for letting one sq. m of office space in the city center amounts to 22-23 euro. Tenants may count on lower rates in the neighborhood of Rondo Daszyńskiego and ONZ where many new investments are currently being realized and also in the Służewiec district. Moreover, the surplus also manifests itself in the high percentage of uninhabited flats in Warsaw – it totals ca. 14 per cent, whereas the average in the largest cities in the European Union does not exceed 10 per cent.
That percentage has been dynamically increasing for the last two years and it is going to still increase due to the fact that the supply of new investments is very high and it is still growing – emphasizes Jędrychowski. – We know how many offices are planned on the next three years. I think that tenants will have very good years for negotiation of old contracts and searching for new areas in a higher standard for the same price.
As Jędrychowski points out, tenants used to choose office areas in the strict city center of Warsaw or in the Służewiec district. Moreover, Śródmieście is often chosen by legal offices and consulting companies due to prestigious aspects.
The offices were also situated across Jerozolimskie Avenue. Furthermore, a new business area in Wola is being realized thanks to the opening of the second line of metro. According to Jędrychowski, tenants may count only on slightly higher rents in that place than in case of Służewiec. – That district is much more closer than Służewiec – there is a metro and better communication there. Moreover, the rates of rents are comparable or only slightly higher – explains Jędrychowski.
There were ca. 4,4 million sq. m of office area at the end of last year in Warsaw. Moreover, over 276 thousand sq. m were present on the market within 12 months and 786 thousand sq. m are currently being under construction.