- In Q1 2016, 142,200 sq m of office space was leased in Warsaw.
- 113,000 sq m of space in the form of six new office buildings, was delivered to market.
- Total office stock will exceed 5 million sq m in H2 2016.
Warsaw, 21 April 2016 – International advisory firm JLL summarizes Q1 2016 on Warsaw's office market.
Mateusz Polkowski, Associate Director, Research and Consulting at JLL, says: “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 sq m mark in H2 2016”.
Demand – tenants head for the centre
In Q1 2016, tenant demand in Warsaw stood at 142,200 sq m. Leasing activity was the most evident in the city centre, which accounted for over 55,000 sq m 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, says: “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”.
Approximately 57,000 sq m of office space leased in Q1 came from new deals secured in existing buildings, and around 8,000 sq m from expansions. Pre-letting activity, on a par with renewals (approx. 37,000 sq m) easily bettered 2015's performance.
The biggest lease agreements concluded in Warsaw in Q1 2016
|Company||Building||Space (sq m)|
|Confidential tenant||Atrium 2||7,500|
|Mettler Toledo||Platan Park I||4,500|
|Stanley Black & Decker||Proximo I||4,400|
|Grupa Pracuj||Proximo I||4,300|
|Prochem||Astrum Business Park I||4,000|
|Philip Morris Polska||Gdański Business Center D||3,500|
|Confidential tenant||Bokserska Office Center||3,500|
|Clifford Chance||Norway House||3,500|
|Baker & Mckenzie||Rondo 1||3,100|
Source: PORF, JLL, Q1 2016
Supply - two towers
In Q1, the Warsaw office market grew - in the form of six new office developments - by 113,00 sq m. These buildings are Eurocentrum Office Complex Delta (25,000 sq m), Astrum Business Park I (22,600 sq m), Atrium 2 (20,250 sq m), Prime Corporate Center (20,150 sq m), Gdański Business Center II C (19,700 sq m) and Królewska (5,400 sq m). 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 sq m while a further 662,000 sq m 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”, adds Jakub Sylwestrowicz.
Vacancy rate and rents
Vacancy rate stands at 14.1%. In Q1 2016, prime rents ranged between €21 and €23.5 / sq m / month in Warsaw city centre and between €11 and €18 / sq m /month in non-central locations.
In Q1 2016, a team of JLL experts advised on office lease transactions totalling approx. 33,000 sq m in Warsaw. This accounts for 35% - the largest share in overall volume of office lease deals signed in Warsaw with the participation of advisory firms.