In Q1 2016, 142,200 sqm of office space was leased in Warsaw, around 113,000 sqm of space in the form of six new office buildings, was delivered to market, and total office stock in the capital will exceed 5 million sqm in H2 2016, according advisory firm JLL summarizing Q1 2016 on Warsaw’s office market.
Mateusz Polkowski, Associate Director, Research and Consulting at JLL, said: “2016 will be a very interesting year on the office market in Warsaw. For the first time in the market’s history, two office skyscrapers, both above 150 metres height – Warsaw Spire and Q22 – will be delivered. Furthermore, total modern office stock in Warsaw will exceed the 5 million sqm mark in H2 2016.”
In Q1 2016, tenant demand in Warsaw stood at 142,200 sqm. Leasing activity was the most evident in the city centre, which accounted for over 55,000 sqm of total take-up in the Polish capital. This illustrates a shift in tenant interest towards central locations, in particular around Rondo Daszyńskiego.
Jakub Sylwestrowicz, National Director, Head of Tenant Representation at JLL, said: “We see growing tenant interest in central locations which are well-served by public transportation, and especially by the metro. There are companies on the market who are willing to pay more for leasing an office in a central location, knowing that this may have a positive influence on recruitment processes and employee satisfaction. Projects developed in the vicinity of Rondo Daszyńskiego and Dworzec Gdański attract significant interest thanks to this change in tenants’ perception.”
Around 57,000 sqm of office space leased in Q1 came from new deals secured in existing buildings, and around 8,000 sqm from expansions. Pre-letting activity, on a par with renewals (about 37,000 sqm) easily bettered 2015’s performance.
In Q1, the Warsaw office market grew – in the form of six new office developments – by 113,00 sqm. These buildings are Eurocentrum Office Complex Delta (25,000 sqm), Astrum Business Park I (22,600 sqm), Atrium 2 (20,250 sqm), Prime Corporate Center (20,150 sqm), Gdański Business Center II C (19,700 sqm) and Królewska (5,400 sqm). Interestingly, in 2016 for the first time in the market’s history, two office skyscrapers – namely Warsaw Spire and Q22 – both above 150 metres height, will be delivered to market.
By the end of Q1 2015, total modern office space in Warsaw was 4,751,000 sqm while a further 662,000 sqm is under construction.
“The high developer activity is a positive signal to tenants. The Warsaw office market is tenant-favourable and enables them to choose between a number of interesting options both in existing buildings and those under development. This allows them to find optimum projects not only in terms of access to public transportation and amenities but, above all, in terms of space efficiency, flexibility and attractive commercial terms,” added Jakub Sylwestrowicz.
Vacancy rate stands at 14.1 percent. In Q1 2016, prime rents ranged between €21 and €23.5 / sqm / month in Warsaw city centre and between €11 and €18 / sqm /month in non-central locations.
