According to “Occupier Economics: Office Market in Warsaw in Q1 2020”, a report published by real estate advisory firm Cresa Poland, Warsaw’s office stock totals 5.59 million sqm, up by approximately 1.9% year-on-year. Only one office building was delivered in Q1 2020. And there are 24 schemes currently underway, of which 12 are scheduled to be completed by the end of this year.
Only one office building was added to Warsaw’s office stock: HB Reavis’ Varso 1, offering 6,700 sqm of office space. Most of the building’s space will be occupied by the NYX hotel. Although the economic uncertainty due to COVID-19 is also having an impact on the office market, a number of new office projects will be completed in the coming quarters, including: Chmielna 89 (Cavatina), The Warsaw HUB (Ghelamco), and Varso 2 (HB Reavis).
Leasing activity amounted to nearly 139,000 sqm in Q1 2020, down by 0.8 pp on the same quarter last year. New leases accounted for 55% of the leasing volume, while renegotiations and expansions made up 31% and 14% of all deals, respectively.
The largest office deals in Q1 in Warsaw included a renegotiation lease at Konstruktorska Business Center (17,500 sqm, confidential client), and three pre-let transactions: in Fabryka Norblina (8,500 sqm, confidential client), in Warsaw UNIT (4,300 sqm, CBRE), and in Varso 2 (3,800 sqm, Orsted).
“Office absorption hit a low of 23,800 sqm in Q1 2020, largely due to the limited new supply compared to the previous quarter. However, we should observe a systematic increase in this indicator in the coming quarters,” says Bolesław Kołodziejczyk, PhD, Head of Research & Advisory, Cresa Poland.
At the end of Q1 2020, the city’s vacancy rate stood at 7.5%, equating to 418,000 sqm of unoccupied space, down by 1.6 pp on the same quarter of 2019. By comparison, the vacancy rate averaged approximately 8% in the last three years.
Asking rents stand at EUR 11.5-14.75/sqm/month in Służewiec, EUR 12.5-16 in Jerozolimskie Avenue, EUR 16-19.5 in Nowa Wola, and at EUR 17.5-23/sqm/month in the Central Business District.
