Warsaw office market resistant to pandemic
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In the first half of 2020 the absorption of office space in the capital amounted to 86 thousand sq.m. – This is 5% more than in the same period last year. Therefore, the market is still growing and justifies new investments – indicates CBRE’s report “Warsaw Office Outlook H1 2020”. In total, the existing space has been signed for 335,000 sq.m. The market is still growing and justifies new investments – indicates CBRE’s report “Warsaw Office Outlook H1 2020”. Despite the fact that due to the epidemic some tenants postponed their lease decisions and a few resigned from changing their offices, the situation in the capital looks optimistic. Warsaw is one of the largest construction sites in Europe – 700,000 sq.m of office space is currently under construction, 86% of which is in the centre.
– The turmoil on the Warsaw office market, caused by the epidemic, has so far proved to be small. The results for the first half of 2020 look positive. Contracts are still being concluded, tenants’ activity is growing, making up for a slight slowdown in March. Compared to the first quarter, already in April-May, tenants’ activity was 30% higher. This half-year is a kind of exam of stability of the Warsaw office market, which was passed with a good result – says Łukasz Kałędkiewicz, Head of Office Sector in CBRE.
In total, there is 5.69 million sq m of office space in Warsaw. By the end of this year, 250 thousand sq.m is to be delivered to the market, most of which will be in the Western Suburbs of the Centre, i.e. near the Daszyńskiego Roundabout. In total, 700 thousand sq.m is under construction. With the completion of this space, office space in the capital will increase by 12%, making it one of the five largest construction sites in Europe.
Finance continues to lead the way
In the first half of 2020 almost 335,000 sq.m was leased in the capital city, of which 100,000 sq.m in buildings under construction. Companies from the financial and consumer services sector had the largest share in the total space leased, whereas, taking into account the number of transactions concluded, the processing and energy sectors, consumer and business services as well as the IT sector were the most active.
Almost twice as much to choose from outside the centre
The amount of available office space in Warsaw has slightly increased compared to Q1 2020 and is currently 7.9%. It is still the most difficult to find an office in the centre, where there is only 5% vacancy. In non-central locations the vacancy rate is less than 10%.
– Investors are following the needs of tenants who are looking for the best possible connections in the capital city centre. That is why as much as 86% of all offices are currently being built in this region. Their delivery may result in a slight increase in vacancy, which may increase the chances of finding a good place in the best location – says Łukasz Kałędkiewicz, Head of Office Sector in CBRE.
The cost of space rental in the capital city did not change in the first half of this year. In the centre, in modern office buildings, for a month’s rent of sq.m you have to pay about EUR 25, and in other locations about EUR 15.5.