Falling Warsaw office rents boost occupancy rates
Warsaw office building rents have either stayed the same or dropped by $1-$2 per square meter since June, according to an October survey by Lokale Immobilia.
"Rents have fallen slightly over the last six months," said Robert Karniewski, agent with Colliers International, a Canada-based real estate company.
Since Lokale's last such survey four months ago, Warsaw Towers (see chart) has dropped its asking rent to $33 per square meter, 6% below June's $35, according to Healey & Baker, a U.K.-based real estate agency. Also the Krolewska building, which is under construction at the intersection of ulica Marszalkowska and ulica Krolewska, lowered its asking rent from $35 in June to $32 in October, Healey & Baker said.
But a few buildings that quote rents in euros have not dropped their asking rents due to the currency's slide against the dollar. These include the Flanders, Batory and Kopernik buildings developed by Belgium-based Liebrecht & Wood, which have kept their asking rents of E24 per square meter.
Other buildings, such as the Roma Office Center, the Norway House and Warta, have kept their dollar-based rents unchanged over the last four months.
Reform Plaza, meanwhile, is asking $21 per square meter, above the $20 figure it asked for in June.
But the falling rents have helped most buildings to boost occupancy rates. "The demand is there," said Jeroen van der Toolen, head of the agency at DTZ, a consulting firm. "The buildings are filling up."
The Roma Office Center, which was 70% vacant in June, now has only 30% space left, Healey & Baker said. Also, the Nordic Park building, which stood empty in June, is now half occupied, according to Jones Lang LaSalle, the building's agent.
In the suburbs, the Wisniowy Business Park's building E, which recently stood 55% empty, lowered that rate to 20%, Jones Lang LaSalle said.
When asked whether rents would stabilize or drop even further, property agents disagreed.
"Before the end of the year there will be some major letting," van der Toolen said. He said that rents had already stabilized.
Collier's Karniewski, however, said that rents would continue to go down for another year. "Rents have to drop slightly further," he said.
Rents could also fall as several new buildings are set to come on line in the next year. These include Miodowa 10, City Gate and the Zepter Business Center. In addition to new space, some buildings could put existing offices back on the market. In September, HypoVereinsbank, which rents space in Wisniowy Business Park's building C, recently started trying to sublet 2,900 square meters for $25 per square meter, according to Colliers, which is marketing the space.
