|The first floors of Ghelamco's Warsaw Spire will go up this year|
Courtesy of Ghelamco
The Polish office market saw a higher total lease volume in 2012 than in 2011, which had been considered a good year for the sector. Despite slowing GDP growth, both demand and supply of office space in Poland are still expanding. Experts predict this year should also be good, with vacancy rates slightly higher as the supply of office area in major cities continues to grow.
Colliers experts report that office stock reached 5.8 million sqm in Q4 of 2012. Leasing activity in Q4 of 2012 increased by 10 percent in comparison with the same period of 2011 with pre-let agreements constituting 34 percent of transaction volumes. The vacancy rate stood at 9 percent. This is, however, expected to increase in 2013.
This year will witness an increase in Poland’s total office stock of 630,000 sqm, which will result in growing vacancy rates in the majority of office markets. Leasing activity is expected to remain at levels similar to those in 2012, but due to the increased supply, rental levels may demonstrate a slight downward trend.
Big buyers back in the game
In 2012 there were some spectacular transactions in the office sector in Poland, including the sale of Warsaw Financial Center, International Business Center and Platinium Park, all in the capital. The total volume of investment transactions in Poland amounted to approximately €2.7 billion, which was the largest figure since the beginning of the Great Recession in 2008.
Colliers experts anticipate that there won’t be an increase in investment transaction volumes in 2013, but that international and local investors will continue to show interest. As regards leasing, 2013 will remain a good year both in terms of the new supply as well as tenants’ activity, which should remain at similar levels to those in 2012.
Warsaw corners the market
Of the total of 5.8 million sqm of leasable space at the end of 2012, some 67 percent was located in Warsaw. The other major office markets in Poland – Kraków, Tri-city, Łódź, Katowice, Lublin, Wrocław and Szczecin, noted an average of 25 percent growth in leasable space compared with 2011. Occupier activity was biggest in Kraków and Wrocław.
The largest deals outside Warsaw included Hewlett Packard renewing its 6,700-sqm lease in Wrocław’s Globis and investment management company BNY Mellon’s pre-lease of 6,230 sqm in Aquarius Business House in Wrocław. Throughout the whole of 2012, more than 35 percent of the transactions concluded were pre-leases.
But the majority of office leasing activity was and will be concentrated in Warsaw. And it is the country’s capital where the office space supply will be the biggest.
New stock about to roll off
In the early spring first tenants should move into Business Garden Warszawa office complex, developed by SwedeCenter at the intersection of ul. Żwirki i Wigury and ul. 1 Sierpnia in Warsaw. The two buildings, comprising a total of 32,000 sqm of GLA, will be ready in Q3 this year. The whole development will comprise seven buildings with a total area of 90,000 sqm. The first structures will provide 14,600 sqm and 17,500 sqm.
The Plac Unii mixed-use investment on a triangular plot between ul. Waryńskiego, ul. Puławska and ul. Boya Żeleńskiego in the center of Warsaw, is set to be delivered by October. The completed project will consist of three buildings connected by a glass roof 30 meters above ground level.
In addition to offering around 40,000 sqm of office space and 16,000 sqm of retail and commercial space, the development will also contain restaurants, cafes and various service points. The office space in the building currently being constructed by Liebrecht & Wood and BBI Investment has obtained a “Very Good” BREEAM certificate of energy efficiency and environmental performance.
Designed by the Kuryłowicz & Associates architectural studio, the development will offer 15,500 sqm of retail space and 41,300 sqm of class-A office space anchored by Grupa ING, which will occupy 11 out of the total of 21 office floors available in the investment.
More on the way
Other office buildings will soon start emerging as well. In the second half of 2013 Warsaw should see the first floors of Belgian developer Ghelamco’s flagship commercial investment in the Polish market – Warsaw Spire, a 220-meter, 49-storey skyscraper and two lower buildings, of 55 meters each. The developer completed excavation of underground floors last December, digging up some 230,000 cubic meters of earth. The lower structures of the Spire are scheduled for completion in the fall of 2014 and the tower will be delivered a year later.
In the spring Echo Investment will launch construction on a 3,300-sqm plot on Al. Jana Pawła II, where the recently demolished Mercure hotel building stood. A new office tower, for which the company has already obtained a planning decision, will stand 155 meters tall and comprise some 50,000 sqm of space.
Just a city block away, on ul. Grzybowska and ul. Żelazna within Warsaw’s Central Business District, Liberty Development hopes to begin construction of its Liberty Tower this August. The developer has already obtained several building permits. The project comprises a 26-storey, 140-meter office skyscraper, two low-rise office buildings and the additional reconstruction of pre-war historical monuments in the surrounding area.
Already in April, Centrum Bankowo Finansowe Nowy Świat plans to launch construction on its Nowy Świat BIS office building in downtown Warsaw. The facility, comprising almost 11,000 sqm of office space, is scheduled to be turned over for use in June 2015.
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