WARSAW’S POWISLE DISTRICT A MAGNET FOR OFFICE TENANTS
- Central location and competitive rents an attraction -
- 2014 will bring record supply of office space to the area -
- Vacancy rate in Powisle at just 1% -
Warszawa, 10th December 2012 – According to CBRE, the leading commercial real estate services firm, Warsaw’s Powisle district is becoming an attractive destination for office tenants, who value its central yet quiet location and competitive rents...
Warszawa, 10th December 2012
According to CBRE, the leading commercial real estate services firm, Warsaw’s Powisle district is becoming an attractive destination for office tenants, who value its central yet quiet location and competitive rents. Poor supply of new office space resulting from limited availability of investment plots means that pre-let leases for new office buildings in the district are usually signed at the early stages of project development. In the opinion of CBRE experts, tenants already situated in Warsaw’s Central Business District (CBD) as well as companies with offices in other areas of Warsaw who are looking for an attractive location in a prestigious neighbourhood, number among those interested in Powisle office space. With several new office investments planned in the nearest future and the completion of the second line of the Warsaw underground, Powisle looks set to grow dynamically in coming years.
Powisle houses only 1,5% of Warsaw’s entire office stock. This translates into just 10 modern office buildings with a total area of 60,000 sqm, completed mainly between 1998 and 2001. These include Nordic Park, the headquarters of Amplico AIG, Riverside Park and the Hortus building, completed in 2011.
Lukasz Kaledkiewicz, Director – Office Agency, CBRE in Poland commented:
„Powisle is one of those rare instances in Warsaw where demand for office space seems to significantly outstrip supply. The attraction of the district lies mainly in its close proximity to the heart of the city, improving public transport, due mainly to the construction of the second line of the underground, as well as easy access for commuters who live on the east bank of the Wisla river and travel on the Wislostrada throughway.”
In 2014 and 2015 the supply of new office space will increase substantially. According to the information provided by developers, a total of 52,000 sqm will be completed in four new office projects, of which one is currently being developed, while the construction of the other three should start in the near future. 2014 should see a record supply. At the beginning of the year, the headquarters of the Mazowiecka Spolka Gazownictwa will be completed as part of the Powisle Park development, providing 15,000 sqm. Major investments planned for 2014 include Carpathia Office House, a small-scale office building of 4,700 sqm, developed by GD&K from Krakow, and The Tides office building, headquarters of Warszawskie Towarzystwo Wioslarskie, situated on the river bank. 2015 should see the completion of the first phase of the Copernicus Square complex. It will offer a total of over 20,000 sqm, and will be situated on the site of the former Elektrocieplownia Powisle plant. The investment involves the construction of new buildings as well as the revitalization of existing ones. Other major investments planned in the near future, which will further impact Powisle as a desirable office destination, include the revitalization of the boulevards running along the river and the prospect of the completion of the underground line.
Lukasz Kaledkiewicz added:
„Powisle is a small, friendly neighbourhood, especially appealing to young people interested in culture, science and the arts who are looking for a favourable work environment. Existing office buildings situated there, as well as those planned in the nearest future, offer just that. A very interesting example, representative of Powisle itself, is the Carpathia project, a class A office building which will be situated at Cicha Street 8. Tenants are already showing an interest in it, due to its small, intimate scale, opportunities for flexible space arrangements and interesting architecture.”
The rate of office space leased has been steadily growing in Warsaw, with the exception of a poor 2009. In the first three quarters of 2012, a total 455,000 sqm was leased in Warsaw with 23% situated in the city centre and just 8,000 sqm in Powisle. Taking the activities of office tenants into account, a record 2012 is expected as far as leased office space is concerned. At the end of Q3 2012 the office vacancy rate in Powisle was below 1%, while for the city centre it stood at 8.7%. Nominal rates for prime office space in Powisle are around 18 – 20 EUR/sqm/month and have not changed for some time, with effective rates around 15% lower. Due to little competition in the area, they should not change significantly in the nearest future. Nominal rates for class A office assets in Warsaw’s Central Business District stand at 26 – 27 EUR/sqm/month.
Due to a limited supply of office projects in Powisle, there have been only three investment transactions during the past three years. Riverside Park changed owners twice, sold in 2005 and 2007, while Nordic Park was the object of a transaction in 2006. As the number of new office developments will rise in 2014 and 2015, CBRE experts also foresee increased investment activity.