- Over 300,000 sq m of office space to be supplied to the Warsaw market in 2013 -
- Increasing retail development in Warsaw this year -

Warsaw, 8 May 2013 – According to the latest report by CBRE, the world’s largest commercial real estate services company, over 300,000 sq m of new office space is to be delivered to the Warsaw market in 2013. Historically, only the years 1998 and 2000 saw higher volumes of office space delivery in Warsaw.

In the first quarter of 2013, Warsaw’s office stock increased by 76,200 sq m and reached over 3.9 million sq m. The most recent completions include Konstruktorska Business Centre (48,000 sq m) and Ambassador (15,600 sq m), both in Mokotow. Currently, there is around 590,000 sq m of office space under construction in Warsaw, translating into one of the largest pipelines in Europe.

Tenants are also very active, according to CBRE data, with lease contracts for 155,000 sq m signed in the first quarter of 2013, of which renewals were 37% and pre-lets accounted for 19% of the total.

Konrad Heidinger, Consultant, Research & Consultancy, CBRE in Poland:
“Cost reductions seem to be a major demand driver in the Warsaw office market, with a number of companies seeking to consolidate and searching for new, more flexible headquarters at a lower rent. Office tenants now look with a keener eye at city centre fringe locations due to a more diversified offer and affordable rental conditions. However, non-central locations still continue to attract most tenants.”

CBRE experts forecast the office vacancy rate to exceed considerably 10% by the end of 2013 (with 9.9% at the end of the first quarter 2013). It will have a significant impact particularly on effective rents, which can be even 30% lower than the headline rates in the most competitive areas. Currently, the average office rents in Warsaw are around EUR 14 /sq m/month in non-central locations and around EUR 20 /sq m/month in centrally located buildings.

New retail projects under development in Warsaw

With 1.37 million sq m of retail space, the Warsaw market remains one of the least saturated amongst Polish agglomerations. Only 2.6% of the total space remains vacant, available mainly in less attractive schemes. Three new projects to enlarge the retail supply this year include Factory Annopol, Galeria Miejska Plac Unii as well as Galeria Podkowa in Podkowa Lesna. Additonally there are two expansions - a second phase of Auchan Lomianki and a new expansion of Galeria Mokotow.

Several new retail schemes are also at the planning stage. The most significant include GTC’s projects in Wilanow and Bialoleka, Galeria Nova in Piaseczno or Galeria Kabaty. On top of that, smaller developers are also active and are investing in a number of convenience centres and galleries in residential neighbourhoods.

Additionally, the Warsaw high street sector is clearly developing. The prime retail zone visibly expands not only along Royal Route and Marszalkowska St. but also along the parallel corridor of Bracka and Mokotowska streets up to Zbawiciela Place and further will stretch up to Plac Unii, once Galeria Miejska opens there.

Agata Czarnecka, Senior Consultant, Research & Consultancy, CBRE in Poland:
“At the same time, demand for retail space is not expected to ease, as over 30 new retailers entered in 2012, and 10 new brands announced for opening only last quarter in Poland. Hollister, Boomerang and Charley’s have already started their activity in Warsaw.”

According to CBRE experts, average rents remain stable at EUR 30 - 45 /sq m/month, with the best units in prime shopping centres and high streets reaching EUR 75 - 90 /sq m/month