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Warsaw office market expanding by 15% in the next year

3 MIN READAugust 22, 2019
The office market in Warsaw is expanding by almost a million square metres in the next year, as national high profile tenants and international investment congregates at the Polish capital. A report from Colliers explores the rapid growth of the city’s office market, explaining how since their last ‘Warsaw Office Zones guide’ in 2017, the market grew by half a million square metres whereas the vacancy rate fell to 8.5%. According to the report, the Polish capital is leading the CEE (Central Eastern Europe) into exciting new prospects and real estate investment opportunities.

As the city entered Q3 the modernised office supply reached 5.5 million sq m. Something quite shocking to note is that this comes at a time where Warsaw still has an all time low availability rates; signifying they are currently operating on a huge demand that hasn’t yet equalled out. 

However, the enormous amount of space currently under construction amounts to almost 15% of the market. Compare this to the last 30 months, where new completions in the city’s central zone accounted for only 3.2% of the market. The take-up volume in this period is going to be five times bigger. 

Similar to growing cities in emerging markets such as India, office demand is primarily led by coworking operators and BFSIs. In CEE, particularly Poland, these financial sector companies choose to legitimise themselves by centralising their operations in a prestigious project in the centre of capital cities. This is reflected in the 207,100 square metres of commercial assets currently under construction in Warsaw’s business sector, one of the geographically smaller districts despite contributing to about a third of total construction. 

Coworking assets and serviced offices in Warsaw were extremely active in the analysed period, according to the report. Transactions concluded by flex operators exceeded the level of 100,000 square metres, mainly locating their offices in Śródmieście. This is because developers are starting to notice the decreasing vacancies, indicating an imminent raise in rents. 

What are the top growing districts in Warsaw for office investments?

  • West city centre zone - 416,100 M² under construction
    • A recently emerged hub for office space, this district is current attracting huge amounts of investor interest and is the most popular direction for financial tenants; mBank, Getin Noble Bank and BGZ BNP Paribas have all consolidated large spaces here. It also has very convenient public transport services, and an established retail sector.
  • Warsaw CBD - 207,100 M² under construction
    • Great image and a very prestigious location as international coworking providers look to have their brand active in the very heart of Warsaw. WeWork, Regus and the Cambridge Innovation Center helps to bring 50,000 square metres of high quality services office. Currently seeing a wave of high budget tower projects including Varso - about to become the highest office and 5th highest building in Europe. 
  • Mokotow zone - 65,100 M² under construction
    • By far the largest office zone, contributing to 20% of Warsaw’s total supply with 1,450,400 M². Very low rents, as well as proximity to the airport and a high parking ratio proves to be very attractive for tenants.

For more information on the future of offices in the CEE market and Europe, GRI Offices 2019 takes place on 19 - 20 November in London.

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Article by Matt Harris
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