Developments force Warsaw office district map redraw
The Warsaw office market continues to grow, in terms both of new developments being delivered and of new lease agreements taking up much of the additional space. Q1 2017 numbers from JLL and other participants in the Polish Office Research Forum show that 10 buildings with total space of 84,200 square metres were delivered to market in the first quarter and that lease agreements were signed for a total of 194,000 square metres, up 36 percent on Q1 2016. The weighty demand is such that PORF has decided to revise the borders of Warsaw’s office districts.
“The first three months of 2017 in Warsaw’s office market were very successful,” says Anna Młyniec, head of office agency and tenant representation at JLL. “Demand was nearly 194,000 square metres, [and] major projects were delivered to market, with the vacancy rate dropping to 14 percent. Developers are rightly confident about the market’s absorption, which has resulted in some impressive developments that are currently under construction throughout the city centre.”
Nearly 93,500 square metres was leased out in the city centre. “For several quarters in succession, the city centre has surprised us with stellar levels of demand, in part driven by corporates that have decided to start operations in Warsaw and have chosen the city centre as a new base. Global brands are attracted to the city centre due to excellent transport infrastructure and access to modern office buildings as well as the prestige of launching a department in the very heart of the city,” Młyniec adds.
Areas outside the city centre also did well in the first quarter, particularly Mokotów and the Jerozolimskie corridor, which together accounted for 72 percent of total demand outside of the city centre.
JLL expects around 310,000 square metres of new office space to be completed this year, a lower level than 2016’s 407,000 square metres. Overall current office construction activity of some 700,000 square metres includes the following large developments: Varso Place (HB Reavis); The Warsaw Hub (Ghelamco Poland); Mennica Legacy Tower (Golub Gethouse); Spinnaker (Ghelamco Poland); West Station (HB Reavis), and; D48 (Penta Investments).
PORF’s redrawing of Warsaw’s business map includes a reassessment of the office centre of Poland’s capital city. In the north, it now extends as far as Dworzec Gdan´ski railway station. To the west, it now ends at Karolkowa Street, instead of at Towarowa, as previously. In the south, the city centre extends to Plac Unii Lubelskiej. The eastern border remains unchanged and is still marked by the River Vistula. The Mokotów district has a new subzone, Słuz˙ewiec. The previous south-west district has been divided into the Jerozolimskie corridor and the Z˙wirki i Wigury corridor. The lower south district has been renamed the Puławska corridor.
All this may not mean much to those of us not working in the Polish or Warsaw office markets but it is a positive indication of the heady levels of development and leasing activity there.
Richard Fleming (firstname.lastname@example.org) is editor of Institutional Real Estate Europe. He is based in Kimberley, United Kingdom.