Warsaw retail market increasingly diversified
According to the latest data from CBRE, the world’s largest commercial real estate services company, Warsaw continues to perform strongly in all sectors of the commercial property market.

Warsaw, 11 February 2014 – According to the latest data from CBRE, the world’s largest commercial real estate services company, Warsaw continues to perform strongly in all sectors of the commercial property market. The office market continues to expand with new 41 schemes currently under construction while the retail market offers the most expensive retail locations in Poland. The capital’s prime rents for the best 100 sq m retail units now reach as much as EUR 96/sq m/month.

Colin Waddell, Managing Director, CBRE in Poland:
“Warsaw real estate is one of the key targets for the majority of institutional funds and private investors, looking to diversify their investment portfolios across Europe. Low market risk and the relative strength of economic fundamentals make Poland and its capital a promising destination and continue to attract foreign companies.”

Warsaw Office
Total modern office stock in Warsaw now amounts to over 4.1 million sq m, 30% of which is located in the City Centre. Currently, there is over 600,000 sq m under construction in 41 office schemes, putting Warsaw among the top five European cities (behind Paris, London and Moscow) with the highest office development activity. The biggest office schemes now underway in Warsaw include Warsaw Spire (100,000 sq m), Q22 (52,000 sq m) and Gdanski Business Centre (49,000 sq m).

Lukasz Kaledkiewicz, Director, Office Agency at CBRE in Poland:

“Increasing activity from office developers is strongly linked to robust demand from tenants. With the exception of 2009, annual gross take-up in Warsaw has surged constantly for over a decade. In the last quarter of 2013 leasing activity in Warsaw reached 115,000 sq m. As a result, as much as 633,000 sq m was leased throughout 2013, translating into 4% annual growth. The number of on-going leasing processes suggests that 2014 might bring another record in this regard.”

Łukasz Kaledkiewicz added:
“Tenants in Warsaw still want to expand and improve the standard of their premises, triggering strong demand for new office space. However Warsaw is seeing increasing vacancy rates - 11.8% at the end of 2013, in comparison to 8.8% at the end of 2012. This is due mainly to a relatively high number of speculative deliveries and the high propensity of office tenants to relocate from B-class to modern A-class buildings. Continuing activity from developers may contribute to further growth in the level of vacancy. In our opinion, in the long run, the additional space should be gradually absorbed by the market.”

Warsaw Retail
Warsaw’s stock of modern retail space of 1.4 million sq m at the end of 2013 translates into a saturation of just 430 sq m per 1,000 inhabitants. This provides numerous retail development opportunities. Although there is just one project under construction (7,000 sq m in Royal Wilanow), there are more schemes in the pipeline. They include small, convenience or mixed-use projects such as Hop Stop in Falenica (7,000 sq m), Vogla Park (11,000 sq m) and Ferio Wawer (12,000 sq m) as well as large projects such as Fabryka Wolomin (31,000 sq m), Galeria Wilanow and Galeria Bialoleka (60,000 sq m each).

With new international retailers on the Polish market still preferring to locate their stores in prime shopping centres rather than on high streets, this section of the capital’s retail market is awaiting infrastructural changes that are likely to boost it considerably. The most important milestone is the completion of the second metro line’s central junction at Swietokrzyska Street scheduled for the end of 2014. Nowy Swiat and Trzech Krzyzy Square continue to be seen as Warsaw’s best high street locations.

Beata Kokeli, Senior Director, Head of Retail Agency, CBRE in Poland:
“In Warsaw, well-performing schemes are being extended in order to retain clients by offering them more choice, while older schemes are being enlarged and upgraded. The most current examples of pipeline extensions and new phases include Centrum Janki, Wola Park, Promenada and Arkadia. We are also seeing an increasing number of mixed-use (office and retail) city centre schemes with existing Smyk, Centrum Bankowo Finansowe and Centrum Marszalkowska (former Sezam store) as the most prominent examples. This is expected to give a substantial boost to the development of high street retail. Developers have also become more willing to redevelop old historical sites into retail/mixed-use projects with pioneers such as BBI Development (Koneser) and Griffin Group (Hala Koszyki).”

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