Savills: There is a shortage of offices in Warsaw

In Warsaw, we are seeing the lowest vacancy rate in five years, and new supply is not keeping up with demand. These conclusions come from the summary of the third quarter on the office market presented by Savills. As we have already informed, the current resources of the Warsaw market amount to 5.42 million sq m. Since the beginning of the year, almost 190,000 sq m have entered the market. sq m of new space. Major investments – over 55 percent area – carried out in central locations (COB and Centrum).

As we read in the Savills report – Developers are not slowing down – almost 740 thousand sq m is currently under construction. The largest projects, such as: Mennica Legacy Tower, Generation Park Z, Chmielna 89 or Wola Retro, will be put into operation only from mid-2019. Taking into account the record low vacancy rate, it can be assumed that 2019 may be a very demanding year for companies. , which will be looking for a new office in the capital. At the end of the year, there may be very little or even almost no choice. Tenant activity has been high in the last three quarters. Almost 632 thousand sq m were rented. sq m of offices It is worth noting that it was almost equally distributed between central and non-central zones.

– Considering the fact that the last quarter of the year usually sees the highest tenant activity, we can expect that throughout 2018 the volume of demand will be similar to or exceed that of the record-breaking 2015, i.e. 834,000. square meters – says Wioleta Wojtczak, director of the research and analysis department at Savills.

Availability and price

The good news for tenants is that despite limited availability, which will continue to decline, nominal rents for prime office space in Warsaw remained unchanged in the third quarter of 2018. In the Central Business District and in the center they range from EUR 21.00 to EUR 25.00/sq m/month on the top floors of tower buildings. However, in the best buildings located within Służewiec, they range from EUR 13.00 to EUR 14.75/sq m/month.

– Due to the decreasing availability of projects offering immediately available space of the highest standard, the incentive packages for tenants offered by property owners are successively reduced in all locations in the capital. We are observing a progressive trend of reducing rent exemption periods, while increasing the funds provided to tenants to cover the rising costs of space finishing. – adds Daniel Czarnecki, director of the office space department, landlord representation, Savills.