Demand for office space slightly down in 2014 – CBRE

Poland’s office market has recorded a slight decline in demand, which is estimated at 600,000 sqm for the entire 2014, according to CBRE. This is largely caused by cyclical factors. Five years ago, in 2009, tenants were reluctant to sign new leases due to the global financial crisis and since the majority of leases are five-year contracts, this year also saw few renewals, said Daniel Bienias, senior director at CBRE’s tenant representation department. “Demand should pick up in early 2015. However, the market will gave to face the sizable supply of office space which translates to lower rent rates,” Bienias said. Throughout 2015, some 900,000 sqm of new office stock will be delivered, and another 600,000 sqm is scheduled for 2016. Warsaw, which currently has some 4 .5 million sqm of office space, has 46 new schemes under construction, set to add 660,000 sqm. The oversupply will culminate in Q2 2016 and that is when Warsaw will see the record-high vacancy levels of some 18-21 percent, CBRE experts estimate.