Azora Europa has sold two office projects located in Krakow, Green Office and Avatar, to Cromwell European Real Estate Investment Trust (CEREIT) for EUR 78.2 million. Savills advised the vendor on the disposal of both assets.
Commercial real estate companies, especially those offering warehouses, offices and hotels, were very visible at this year’s Expo Real 2019 in Munich. The growing interest of international investors in Central and Eastern Europe, including Poland, is continuing. The value of investments in the first half of the year alone in Poland was in excess of EUR 2.72 billion, and dozens of deals are still being negotiated.
Despite signals of an impending economic slowdown in Europe, there is no shortage of capital in the market, unlike prime investment product. This is why we are seeing an increase in transactions in which funds are investing at the development stage. The trend applies to both the commercial sector and the institutional segment in the housing sector.
Capital from Asia
The most interesting stream of investment capital at the moment is flowing in from Asia. Far Eastern funds want to buy and have large amounts of money to spend, which means that developers and owners can achieve high sales prices. The effect of this is further yield compression, although the commercial real estate sector in Poland in terms of investment remains competitive compared to western markets.
Investment sentiment is good and the assessment of the Polish market remains high. During a slowdown, it is natural to search for savings, which gives the warehouse and office sector in Poland a competitive advantage over western European markets, including the largest one in Germany.
Another issue favouring investing in Polish real estate is the prolonged uncertainty regarding the Brexit agreement between the European Union and the United Kingdom. Many companies are not waiting and are relocating, which benefits the rental market in our region.
To sum up, this year’s Expo Real 2019 showed how the market in Poland has grown and changed in every sector in recent years. The quality of the exhibition space, as well as the visibility and activity of Polish companies and institutions, were incomparably higher than in previous years.
Source: AXI IMMO
UNITY, an IT services provider, has signed an almost 1,900 sq m office lease at Silver Forum in Wrocław. Kensington Silver Forum Sp. z o.o., the owner of the office building was represented by property manager MULTI POLAND Sp. z o.o. and global real estate services firm Cushman & Wakefield, which is the exclusive commercialisation agent for the building. The tenant was represented by Nuvalu Polska.
Silver Forum is a modern Class A office and service building located in the immediate vicinity of Strzegomski Square, in the Old Town district, and is a natural gateway to the western business zone. The building enjoys first-rate access to public transport and a prime location on the map of Wrocław. Silver Forum offers more than 15,000 sq m of office space.
“In this transaction we successfully met the high expectations of UNITY, which subsequently decided to join other tenants of Silver Forum. The office space leased by UNITY will be fully tailored to their technical requirements. It is important insomuch as tenants from the modern business services sector require a high office standard that is in line with the latest trends and appropriately suited to the nature of their operations,” said Marcin Siewierski, Associate, Office Agency, Cushman & Wakefield.
“Silver Forum is currently undergoing an advanced process of recommercialization. We are glad to host UNITY as a one of the key tenants in our office. We are pleased to gain trust of a company that decided to relocate the headquarters to Silver Forum in Wroclaw,” – said Małgorzata Słowik, Multi’s Head of Leasing.
UNITY S.A. has 22 years of experience in IT projects providing companies with technological support in their digital transformation. It delivers design, implementation and maintenance of IT solutions in business processes, design of websites and e-commerce systems. Unity S.A. has offices in Poland, Switzerland and USA.
Source: Cushman & Wakefield
Edison Energia, solar photovoltaic systems and consulting company, leased approx. 400 sqm of office space at University Business Center I. Knight Frank’s Landlord Representation experts advised the building’s owner, Atenor.
The strongest occupier demand for office space in Warsaw was registered in 2018, with nearly 860,000 sq m transacted in 12 months. Occupier activity remained slightly subdued in the first quarter of 2019, but picked up significantly in the next two. Leasing volume hit almost 690,000 sq m in the first nine months of the year, Poland’s all-time high for the first three quarters of a year.
The robust level of office take-up was largely driven by occupier activity in the third quarter, which was the best-performing quarter in the history of the Polish market. Warsaw’s total leasing volume reached nearly 285,000 sq m of modern office space in the past quarter, largely boosted by two record-breaking transactions: mBank’s pre-let for 45,600 sq m in Mennica Legacy Tower and the renegotiation by Orange Polska of its lease agreement for 44,850 sq m in Miasteczko Orange.
“This year is clearly being marked by large deals. Rather than slow down, the market accelerated in the holiday season and office take-up is therefore likely to beat last year’s record. Even if this does not happen, office take-up will definitely be very high; such a robust level of occupier activity for the second year in a row is confirmation of the very good health of the Warsaw office market,” says Daniel Czarnecki, Head of Landlord Representation, Office Agency, Savills.
According to Savills, 61,700 sq m of new space was added to Warsaw’s office stock in the third quarter of 2019. The largest office completion was Wola Retro (Develia; 24,500 sq m). More than 142,000 sq m has been built in Warsaw in the year to date, bringing the capital’s total stock up to 5.6 million sq m.
As much as 120,000 sq m is expected to be completed in the fourth quarter of the year, but some projects may be delayed until 2020. According to Savills data, the development pipeline comprises 760,000 sq m, more than half of which has already been secured under pre-lets or letters of intent. The largest concentration of construction activity is in Wola district, near Daszyńskiego roundabout, where nearly 415,000 sq m is currently underway.
Warsaw’s average vacancy rate edged down to 8.2% at the end of September and is likely to continue its downward trend by the end of this year. There is however strong polarisation on the market, with Mokotów seeing a vacancy rate of 13.7% and central locations posting 5.5%.
Prime headline rents stand at EUR 22.50–25.50/sq m/month for office space on top floors of high-rise buildings in the Central Business District and the city centre, and range between EUR 13.00–15.00/sq m/month in the Służewiec district.
“Due to the record-breaking demand, landlords hold the upper hand in central locations. In addition, there is a growing occupier interest in Mokotów, which is likely to witness increased leasing activity in the coming quarters. And following a period of stagnation, Służewiec is seeing a wave of upgrades of office buildings acquired by opportunistic investors. Refurbished buildings stand a good chance of attracting tenants,” adds Daniel Czarnecki, Savills.
Source: Savills
One of the largest international law firms — Allen & Overy, has chosen an office complex in the heart of Browary Warszawskie as its new Warsaw headquarters. The firm will commence activity here in the autumn of 2020. The lessee was represented by Cushman & Wakefield.
Allen & Overy is one of the largest and most innovative international law firms, operating on the Polish market for over 25 years. With nearly 5,400 employees worldwide and a network of more than 40 offices, the company serves customers in 30 countries, offering efficient solutions and the highest quality legal services. Allen & Overy tends to select special places for their offices. Undoubtedly, Browary Warszawskie, where the law firm has leased 2,750 square meters of space, is such a place. Biura przy Warzelni (Offices by the Brewhouse) is the third and the largest office building in the entire project. It is located in the very heart of a multifunctional project executed by Echo Investment in Warsaw's Wola district. The employees of Allen & Overy will move to their new headquarters in autumn 2020. Browary Warszawskie will allow them to have a vibrant part of the city at their fingertips, they will be able to use the offer of the revitalized 170-year-old former beer cellars of the 19th century brewhouse along with the market square or the secluded park in the Central Garden.
"Browary Warszawskie is one of the best locations in Warsaw for innovative companies. The high standard of this investment is extremely important to us. The new space will allow us to implement the latest arrangement and technical solutions that will support the implementation of our strategy and meet the expectations of our clients and employees. Additionally, the unique history of this place, which Echo Investment brings back to the map of Warsaw but in a new form, is inspiring for us. We want to be a part of a project that changes the image of Warsaw’s Wola district."Arkadiusz Pędzich, Managing Partner of the Allen & Overy office in Warsaw.
Browary Warszawskie is a project that will permanently change the face of Warsaw's Wola district. The new-old quarter will open up to employees, residents and visitors. Allen & Overy is another company that believed in the potential of this place.
"Browary Warszawskie is a unique place on the business map of Warsaw, so we want the companies that will locate their offices here to reflect this uniqueness. It is a future-oriented project not only because of the great atmosphere for business development, but also because of its citygenic nature. Open urban spaces, meeting places created in the historic parts of this project, a cozy residential zone, a wide range of restaurants and cafes will make Browary Warszawskie vibrant with life around the clock. We are in talks with many companies that want to develop here. Allen&Overy is another important point in the development of this location. Their international experience and well-established development strategy based on strong foundations prove that Browary Warszawskie attracts ambitious people." Michał Żelski, regional director in Echo Investment's offices department
"This is the third transaction that we have completed in the Browary Warszawskie with another of our clients. Allen & Overy decided to acquire space in this project mainly because the offered standard and lease conditions perfectly fit in with the original assumptions made at the initial stage of the process. We are convinced that the new Allen & Overy office will be one of the most interesting locations on the Warsaw office map. Moreover, working for such a demanding company was a very valuable experience for us."Krzysztof Misiak, Partner, Head of Office Department in Cushman & Wakefield
Source: Cushman & Wakefield
ATAL SA – a Polish developer – selected Knight Frank as its exclusive agent to commercialize the Krakowska 35 office property in Wroclaw. The consultancy will also manage the property. The edifice with a total area of ca. 14,000 sqm will be handed over for use in Q1 2021.
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