Growing demand, downward adjustment of vacancy rates, increased share of renewals in the structure of contracts signed, and limited supply; these are the primary shapers of the outlook for Warsaw offices in the second quarter of the year. The authors of the report from BNP Paribas Real Estate Poland also draw attention to the already visible consequences of the supply gap and the need for much broader consulting on the search for and lease of office space than before.
The second quarter continued the trend from the beginning of the year. We are talking about high tenant activity and the finalisation of the transactions suspended due to the uncertainty mostly related to the further consequences of the pandemic for the office workspace. However, there is no question of over optimism, as changes on the office market have also been conducted in the shadow of the war in the teritory of Ukraine, with runaway inflation and the spectre of a decelerating economy and recession at the threshold. Some tenants chose to stay or relocate, taking into account the consequences of the supply gap, the pressure on rent rises, as well as the expectation of an increase in fit-out costs and possible delays.
states Dorota Mielke, Associate Director from the Office Space Leasing Department, BNP Paribas Real Estate Poland.
Today, we observe the rent rates increasing from one offer to the next, that lease periods are extending, these factors will shape the demand for Warsaw offices in the near future. In order to cover the fit-out costs today, which on average amount to between EUR 800 and 850 per 1 sqm shell and core, companies decide to accept new contracts with a minimum length of 7 years. And all this in the face of the supply gap and the major challenge for developers to plan new projects under conditions of limited time and cost predictability. As a result, the market will witness consolidation processes, the foundations of which will include, for example, the expectation that hybrid work will be redefined and adapted to today's and tomorrow's realities. It is also an important moment for advisors operating on the real estate market, who should boldly go beyond the existing patterns in cooperation with customers. Multilevel consulting and comprehensiveness of the proposed solutions will be invaluable.
Małgorzata Fibakiewicz, Head of Business Intelligence Hub & Consultancy, BNP Paribas Real Estate Poland.