Warsaw ranked 78th in the most expensive office locations ranking, after a 2.1 percent drop in rents over the past year, according to a report prepared by CBRE. The ranking was topped by Hong Kong, Beijing, London and New York. Belfast, with a 25 percent increase in office year y/y was the city with the fastest growing rents in the world.
“Warsaw is following a different real estate business cycle than most of the other European markets, like Berlin or Stockholm,” explained Łukasz Kałędkiewicz, Senior Dyrektor, Advisory & Transaction Services, CBRE. The total office stock in Warsaw exceeded 5 million sqm last year, with another 850,000 sqm still in the pipeline. The large competition among developers has led to strong downward pressure on rents.
“Developers’ activity is acompanied by stronger tenant demand. The space being delivered is being quickly absorbed by the market. The trend [of falling rents] should reverse within the next two years, provided that tenant demand does not wane. It is very likely that it will remain strong, also because of Brexit, which could lead to increased influx of outsourcing firms to the Warsaw market,” Kałędkiewicz, added.