Expanding market raises questions of space overdose
There's nothing earthshaking about a groundbreaking in itself, but the ceremony did provide a convenient opportunity to consider the way Warsaw's property market has changed over the course of the last two years.
Absent Tuesday was much of the hype that surrounded the construction of the first phase, considered one of Warsaw's most significant projects of the time. More than 1 1/2 years later, Phase II, while also offering high-quality office space, is one of a number of projects under construction or expected to begin within the next six months.
You only have to look down the street. Ilbau is up to about the fifth floor on its Ilmet project, and Healey & Baker is busy marketing the building and ringing doorbells looking to do deals.
A little farther down Pope John Paul II Avenue, just after it turns into Chalubinskiego, is the FIM Tower, the object of much gossip, that now has some good tenants, is looking for more and now seems to get more compliments than criticism.
Out of the city center two office/business park projects are currently under construction - Ochota and Jerozolimskie - and the ground preparation at the Wisniowy Business Park is probably going to entail more than just cutting the grass - as one agent joked earlier in the month. Rumor is that IBM has finally decided to go with Wisniowy, after waffling between that project and Ochota.
In addition to projects under construction, agents have pointed out recently that general office construction seems to be moving forward more quickly than in the past, perhaps representing a turning point for the market. Life has been spotted at several other projects previously thought dead or at least paralyzed.
Sienna Centre, a planned 19,000 square meter complex off of John Paul II Avenue, had been one of the most notorious ghost projects in Warsaw. The developer had been advised by a local agent that it could find an anchor tenant before construction begins, a task which proved daunting. Now that the developer has realized the unlikelihood of that happening - and with a funder eyeing the project seriously - the scheme could more forward as a wholly-speculative project - although there's no word yet as to when.
In early September, Skanska won the tender to build the 8,000-square-meter Norway House (WBJ Sept. 15-21), proposing a fixed-price offer worth $9.7 million. Tender for a general contractor for the 15,000-square-meter Europlex (at Kino Moskwa) is also under way.
The Warsaw Financial Center (commonly referred to as the NBP building, in honor of the tenant that was originally supposed to take about half the building's space), has reportedly been scaled down to around 50,000 square meters and could start moving forward. A tender for a general contractor was held about three months ago. The International Business Center (ul. Polna, by the Polytechnic metro stop) seems to come up more often in conversations as well, as local agents discuss the market.
If all these projects do move forward - and this is not a given - the question may arise: "Is it too much?"
A 1994 poll by Jones Lang Wootton found that 75% of existing tenants need more space, and currently JLW estimates demand at 80,000 square meters per annum and rising.
But while most agents talk of the high demand, its still difficult even for funders to get information on the specifics - the who and how much of the business.
Without this type of information, it's difficult for doubting Thomases to believe the market could support a substantial inflow of new space. One outside observer, looking at developments in Warsaw, said he felt this market, more than any other in Central and Eastern Europe, was primed for a fall. Locals see the market differently. Time will tell who is right.
PORR builds BUW
Austrian contractor PORR International AG signed an agreement last Wednesday to build the Biblioteka Uniwerytetu Warszawskiego (BUW). The total construction cost is estimated at $76.5 million and the building should be completed in March 1999.
ATRUIM TOWER in a nutshell
Gross Area: 17,500 square meters
Net Office: 11,000 square meters
Net Retail: 720 square meters
Total Project Cost: DM 48 million
Construction Cost: DM 35 million
Scheduled Completion: IQ 1997
Letting Agents: Henry Butcher, Jones Lang Wootton
Owner: Business Centre Wola II sp. z o.o.
Shareholders: Gmina Warszawa-Centrum
Gmina Warszawa-Bemowo
Skanska International Building AB
Caisse des Dep*ts et Consignations
Absent Tuesday was much of the hype that surrounded the construction of the first phase, considered one of Warsaw's most significant projects of the time. More than 1 1/2 years later, Phase II, while also offering high-quality office space, is one of a number of projects under construction or expected to begin within the next six months.
You only have to look down the street. Ilbau is up to about the fifth floor on its Ilmet project, and Healey & Baker is busy marketing the building and ringing doorbells looking to do deals.
A little farther down Pope John Paul II Avenue, just after it turns into Chalubinskiego, is the FIM Tower, the object of much gossip, that now has some good tenants, is looking for more and now seems to get more compliments than criticism.
Out of the city center two office/business park projects are currently under construction - Ochota and Jerozolimskie - and the ground preparation at the Wisniowy Business Park is probably going to entail more than just cutting the grass - as one agent joked earlier in the month. Rumor is that IBM has finally decided to go with Wisniowy, after waffling between that project and Ochota.
In addition to projects under construction, agents have pointed out recently that general office construction seems to be moving forward more quickly than in the past, perhaps representing a turning point for the market. Life has been spotted at several other projects previously thought dead or at least paralyzed.
Sienna Centre, a planned 19,000 square meter complex off of John Paul II Avenue, had been one of the most notorious ghost projects in Warsaw. The developer had been advised by a local agent that it could find an anchor tenant before construction begins, a task which proved daunting. Now that the developer has realized the unlikelihood of that happening - and with a funder eyeing the project seriously - the scheme could more forward as a wholly-speculative project - although there's no word yet as to when.
In early September, Skanska won the tender to build the 8,000-square-meter Norway House (WBJ Sept. 15-21), proposing a fixed-price offer worth $9.7 million. Tender for a general contractor for the 15,000-square-meter Europlex (at Kino Moskwa) is also under way.
The Warsaw Financial Center (commonly referred to as the NBP building, in honor of the tenant that was originally supposed to take about half the building's space), has reportedly been scaled down to around 50,000 square meters and could start moving forward. A tender for a general contractor was held about three months ago. The International Business Center (ul. Polna, by the Polytechnic metro stop) seems to come up more often in conversations as well, as local agents discuss the market.
If all these projects do move forward - and this is not a given - the question may arise: "Is it too much?"
A 1994 poll by Jones Lang Wootton found that 75% of existing tenants need more space, and currently JLW estimates demand at 80,000 square meters per annum and rising.
But while most agents talk of the high demand, its still difficult even for funders to get information on the specifics - the who and how much of the business.
Without this type of information, it's difficult for doubting Thomases to believe the market could support a substantial inflow of new space. One outside observer, looking at developments in Warsaw, said he felt this market, more than any other in Central and Eastern Europe, was primed for a fall. Locals see the market differently. Time will tell who is right.
PORR builds BUW
Austrian contractor PORR International AG signed an agreement last Wednesday to build the Biblioteka Uniwerytetu Warszawskiego (BUW). The total construction cost is estimated at $76.5 million and the building should be completed in March 1999.
ATRUIM TOWER in a nutshell
Gross Area: 17,500 square meters
Net Office: 11,000 square meters
Net Retail: 720 square meters
Total Project Cost: DM 48 million
Construction Cost: DM 35 million
Scheduled Completion: IQ 1997
Letting Agents: Henry Butcher, Jones Lang Wootton
Owner: Business Centre Wola II sp. z o.o.
Shareholders: Gmina Warszawa-Centrum
Gmina Warszawa-Bemowo
Skanska International Building AB
Caisse des Dep*ts et Consignations
