According to Savills, the Warsaw office market at the end of September 2022 had 6.34 million sq m. of office space, noting an increase of 3% in the first three quarters compared to the same period last year. One of the most important events on the Warsaw office market in the last three months was the commissioning of the Varso Tower project, the tallest office building in Poland offering 63.8 thousand sq m. sqm office space in the very center of the capital.
Developers present on the Warsaw office market have several projects at an advanced stage of planning. Under favorable market conditions, their construction should start soon. According to Savills, some of these projects have a chance of being completed in 2024, which should slightly reduce the widening supply gap. According to developers' announcements, a clear increase in the available space will not take place until 2025, when over 300,000 sq m may be built in Warsaw. sqm new space.
The total demand for office space in Warsaw reached 608.1 thousand. sq m. at the end of September this year, which is a result of 55 percent. higher in the same period of 2021. The current level of demand therefore accounts for 95 percent. total demand for office space in the previous year. Tenant activity was concentrated mainly in central zones, where 413.8 thousand sq m was leased. sq m, i.e. 68 percent total demand, while in non-central zones tenants have leased 194.3 thousand. sqm In central zones, the highest demand was in the Śródmieście zone, where 272.5 thousand sq m was leased. sqm (45% of total demand in the city). Outside the city center, the most active zone was Mokotów, with a demand of 89.4 thousand sq m. sqm
High inflation and the growing cost of finishing space, combined with the decreasing availability of space in the central areas of the city, should soon translate into an increase in rents, both when concluding new lease contracts and as a result of indexation of the existing ones. In addition, tenants must take into account increases in service charges. In search of savings, especially in new buildings, longer, seven-year lease agreements are more often concluded to compensate the landlords with the increase in finishing costs and allow tenants to be offered a good standard office - comments Daniel Czarnecki, director of the office space department, owner representation, Savills.
Headline rents for the best office properties in Warsaw have remained stable for a long time. Monthly rents in the most prestigious locations of the Centrum zone remained in the range of EUR 21-25.5 per sq m. per month, however, an upward trend is noticeable in several buildings. In Służewiec, rents are still in the range of EUR 13-15 per sq m. monthly. According to Savills data, at the end of September 2022, the vacancy rate in the central area of the city was 11.1%, and in the non-central area - 13%.
