Office Warsaw faces major challenges: deteriorating macroeconomic indicators, rising construction and utility costs, and upward pressure on rents and service charges. In addition, there are delays resulting from broken supply chains, the spectre of a supply gap and a strong reshuffling in the demand structure. On the other hand, the capital city market reports a quarterly record in lease agreements signed and attracts an IT giant that buys one of the newest office-mixed use complexes; all this is according to the summary of the first quarter in the Warsaw office marketprepared by BNP Paribas Real Estate Poland experts.
Tenants’ activity returns
The gap is coming fast
In the coming quarters, the supply gap will be one of the main factors shaping the structure of leasing in Warsaw. Tenants will increasingly choose to negotiate in existing locations and extend their contracts. And these, in the shadow of the lack of new supply, high costs of construction, finishing and maintenance of buildings, will most willingly be concluded for a period from 3 to 5 years
emphasises Ewa Nicewicz, Consultant from the Office Space Leasing Department, BNP Paribas Real Estate.
Revived demand and shortages in the supply of new space will translate into a marked decline in the vacant office rate. The stock to be considered will be older buildings, the owners of which will either decide to renovate and modernise their office function, or change their function (e.g. to Private Rented Sector, which is likely to accelerate its development as a result of increased demand observed in the last weeks), or face the prospect of optimising rental rates, as a large proportion of them are not so technologically advanced as to effectively reduce maintenance costs
adds Klaudia Okoń, Consultant from Business Intelligence HUB.