Warsaw has been the hardest to get an office in 6 years, but 2020 brings a respite
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Last year, over 162,000 sqm of office space was completed in the capital. This is 30% less than in 2018, when the total amount of 233 thousand square metres was added. The interest in offices in Warsaw is not decreasing – the availability of non-rented premises in the capital dropped from 8.7% to 7.8% y-o-y. There are even fewer of them in the centre, where the vacancy rate reached 5.4%. Institutions which are looking for a new location for themselves must hurry. In 2020, more than twice as much office space is planned to be delivered to the market as a year ago, as much as 60% of it is already leased.
– Availability of offices in the capital city, especially in the most popular area – in the centre, has been decreasing for several years now, even though new investments are still being created. This is due to many factors, among which, of course, intensive economic growth, new investments or new companies that need headquarters are important. Another important factor is the employee market, provoking competition between tenants for the best, modern and well-connected office. Therefore, many entities that have been occupying the same location for years have recently been looking for something new. Many important investments will be completed in the coming months and as a result, in 2020, more than twice as much office space will arrive as in the previous year, which will result in an increase in available space – says Mikolaj Sznajder, Director of Office Space Department at CBRE.
New office first in the city centre
There is currently 5,587,000 sqm of office space in Warsaw, of which only 7.8% remains for lease. There is even less choice in the centre, where 5.4% is available. As CBRE experts point out, despite better and better communication in the whole of Warsaw and modern office buildings being constructed in other districts of the city, e.g. in Służewiec, the first choice of tenants remains the centre.
In 2019, 162,000 sqm increased in the whole city, of which 35% in the centre. However, only 2020 and the following years should satisfy the appetite for new offices. This year, tenants will gain as much as 423 thousand sqm, more than twice as much as last year. As much as 366 thousand sqm will open in the most popular central area of the city. As CBRE experts note, the high demand visible recently caused 60% of these new spaces to be already covered by lease agreements. Forecasts indicate that in 2021 the level of new space will be maintained and 344,000 sqm of space will arrive on the market.
High demand does not influence rental rates
Despite the high demand for offices in Warsaw, the constant inflow of new investments has a stabilizing effect on rents. During the year they increased slightly – in prime locations, especially in the centre, they reached the level of EUR 25 sqm/month, compared to EUR 24 sqm/month the year before. On the other hand, the average amounts in the capital city are now less than EUR 18, which means that average rental rates have been maintained in comparison with the situation a year ago. Warsaw remains competitive with other European capitals.