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Based on a new office market report “Q2 2012 Polish Office Market Summary”
Warsaw, 16 of July, 2012 – Jones Lang LaSalle experts summarized the office market data and trends in Warsaw and other key cities in Poland after Q2 2012. Set out below are key finding from the research paper:
• Demand: In Warsaw, approx. 173 000 sq m was leased in Q2 2012, which combined with the take-up registered in Q1 totals over 298,000 sq m in the last 6 months. New lease agreements represented 67% of the entire take-up volume in H1 2012, while the remaining 33% were renewals of the current leases. Importantly, pre-let agreements had a 30% share in all concluded transactions. The largest pre-lets in Q2 included T-Mobile signing for 27,000 sq m in Marynarska 12, being developed by Ghelamco and Allianz taking 6,800 sq m in Łopuszańska Business Park - also by Ghelamco. Q2 2012 saw also two large lease renewals from Axel Springer (9,100 sqm in Trinity Park I) and AXA (7,000 sq m in Warsaw Trade Tower). In addition to Warsaw, the main office markets in Poland, namely Kraków, Wrocław, Tri-City, Katowice, Łódź, Poznań, Szczecin and Lublin featured a positive occupier sentiment with almost 180,000 sq m leased in H1 2012, of which 87,000 sq m was registered in the Q2 2012. Similarly to the capital city, the pre-let agreements represented 27% of all transactions. Amongst all office markets outside of Warsaw, Kraków and Tri-City took a clear lead in respect of occupier activity in both Q2 and in the entire H1 2012, with the largest deals in Q2 being: State Street (with a renewal of 12,600 sq m in CB Kazimierz by GTC and 3,100 sq m in Edison by GTC, in Kraków), a confidential newcomer from the financial sector (pre-let for 4,800 sq m in Bonarka4Business by TriGranit, in Kraków); Cisco Systems Poland ( a pre-let of 3,800 sq m in Enterprise Park by Avestus, in Kraków), Lufthansa Systems Poland (a pre-let of 3,500 sq m in OPERA Office by EURO Styl – in Tri-City) and a company from a telecommunication sector ( a new deal for 3,300 sq m in CB Francuska by GTC – in Katowice).
• Supply: Approx. 92,500 sq m of office space was delivered in H1 in Warsaw, including 45,000 sq m completed in Q2 2012. The largest buildings which came to the market last quarter include: Poleczki Business Park II by UBM/CA IMMO (21,000 sq m), Platinium Business Park V by GTC (11,650 sq m) and Ufficio Primo by Kulczyk Real Estate Holding (5,900 sq m). Q2 2012 brought almost 39,000 sq m of new office space to the market outside of Warsaw, of which 52% was in the Tri-City; namely Garnizon.biz - Omega & Gamma by Hossa (9,600 sq m), BCB Business Park - B1 by BCB (8,900 sq m) and Jysk HQ (1,700 sq m). Other major new additions to the market were: Wojdyła Business Park II by Wojdyła (7,800 sq m) in Wrocław and refurbishment of Victoria Business Center by Monti (4,800 sq m) in Poznań. In H1 2012 the total new supply was 65,000 sq m with 490,000 sq m of office space being under active construction in the major cities in Poland (excluding Warsaw) - the majority of which is found in Wrocław, Tri-City and Szczecin. In total, nearly 1.1 million sq m are under construction across Poland including office buildings being developed in the capital city.
• Vacancy rates: At the end of Q2 2012, approximately 7.4% of the modern office stock in Warsaw was vacant (7.8% in the Central Business District, 8.5% in the City Centre Fringe and 7.0% in Non-Central locations). The vacancy rates in the remaining key office hubs in Poland ranged from just below 4% in Wrocław to 14.5% in Łódź. Q2 2012 saw vacancy rates remain stable in Wrocław and Poznań, whilst slight downward pressures were observed in Kraków, Łódź and Katowice. Only Tri-City had an increase in the vacancy level, with the rate now standing at 9.1%, up from 7.0% in Q1 2012. • Rents: Prime headline rents in Warsaw remained stable when compared to the end of 2011. Prime office space in Warsaw City Centre now fetches between € 22 and € 25 /sq m / month. The best Non-Central locations, such as prime buildings in Mokotów, are being leased at € 15.00 to € 15.50/ sq m / month. During Q2 2012, prime headline rents remained stable also in the majority of office markets in Poland. Prime headline rents currently range from €11 to €13 / sq m / month in Łódź, up to €16 in Poznań.
Tomasz Czuba, National Director, Office Agency, Jones Lang LaSalle comments: “The last few months have certainly been good for the office market. In the H1 of 2012, 158,000 sq m of modern office space was delivered, 92,500 sq m of which was completed in Warsaw. Our research indicates that further 182,000 sq m of new office space will be delivered to the Warsaw market in the H2 of 2012 and as much as 300,000 sq m in 2013. Currently, 1.1 million sq m of modern office space is under construction across Poland. In addition, we observe a positive occupier sentiment and a strong interest from tenants in the new office space, which is also reflected in the statistics. Despite the fact that companies are often looking for interesting, sustainable and green projects, cost effectiveness still remains a major factor in the decision making process.”
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