First half office letting bleak; agents hope recovery dawning
Office tenants leased only 40,000 square meters in the first half of 1999, according to figures from Henry Butcher Poland. This is only about a quarter of the 180,000-200,000 square meters leased or bought by office tenants last year, said Brian Burgess, country manager of Henry Butcher in Poland.
Burgess said that low take up this year as well as in the last quarter of last year (almost all of the space taken in 1998 was leased or bought in the first three quarters) was a result of the Russian crisis. "Everyone was depressed six months ago," Burgess said. "Office occupiers did nothing." He added that in the beginning of 1999 such pessimism continued.
But Burgess and others expect the market to quickly bounce back. He added that 1999 take up should equal and perhaps even surpass the 1998 level with the possibility for 250,000 square meters to move.
"There are a number of big tenants looking around," Burgess said. "The second half of the year is going to be very busy."
The rumored move of German financial group Allianz to the Europlex building (Lokale Imobilia June 14) is going to lead the recovery, Burgess said. "They are about to announce this," Burgess said about Allianz, which is believed to be on the verge of taking up to 10,000 square meters in the Europlex on ulica Puławska. Allianz has said it is in negotiations regarding Europlex, but a deal has yet to be finalized.
Allianz could be followed by KPMG which plans to leave the Lim Center and is scouting the market for 6,000 square meters of office space, Burgess said.
In addition, agents at Healey & Baker are looking for space for pension funds, while DTZ Debenham Zadelhoff is eyeing space for delivery giant DHL and French law firm Gide Loyrette Nouel. Both the latter companies are looking for about 1,500 square meters of space. "There are plenty 1,500 square meter deals just waiting to be signed," Burgess said.
Not tallest, but deepest
Telecom giant Telekomunikacja Polska (TPSA) never seems to do anything in a small way. So it may not come as a surprise that even though the company's new headquarters won't be the tallest building in the city, it will be the deepest in the city.
Because of this, TPSA only held its cornerstone ceremony in late June, even thought construction was underway for more than a year. Why? The cornerstone is usually laid at the bottom of the building, and it took builders one year to reach the bottom, said Andrzej Piasecki, chairman of Pia Piasecki, the construction company that is general contractor for the zł. 225.3 million ($58 million) building.
"We know that definitely it would be the deepest building in Warsaw," Piasecki said. The 50,000 square meter building in central Warsaw will be 20 meters deep and will have five underground levels with 300 parking spaces. Above ground, the building on ulica Twarda just behind the Hotel Mercure will be 32 stories or 120 meters tall. That comes up short against the nearby Warsaw Financial Center, which is 140 meters, not to mention the Warsaw Trade Tower, which spirals up 184 meters.
TPSA will use the mammoth structure, planned for completion late next year, for its own activities. "We never planned to lease this building," said Katarzyna Łuczak, a TPSA public relations manager.
The building will host TPSA's headquarters as well as a switchboard capable of handling 60,000 numbers, Łuczak said. She added that the firm decided to put such a large switchboard there because of expected development of the area around the Palace of Culture and Science. And the depth of the building won't be the only thing that makes it unique. There will also be a "leaning" panoramic elevator linking the ground floor with a 28th restaurant floor, Piasecki said. The elevator will go straight up, but at a 13 degree angle from the surface of the building. The idea is to make the building a "tourist attraction," Piasecki said.
Mall opens in August
DT Casino, a French developer in a joint venture with local firm Apsys, in August plans to open the first phase of the $70 million shopping mall Centrum Handlowe Janki, south of Warsaw. The shopping mall, to be located just across the street from the existing Ikea mall, will have 75,000 square meters of retail space. The first phase of the development to be completed in August includes a 14,000 square meter Geant hypermarket, and 80 small shops. Centrum Handlowe Janki is located on 20 hectares and includes parking spaces for 3,000 cars, according to DT Casino. The second phase of the development, which is to be completed by late 2000, will include a 12-screen multiplex cinema to be operated by Ster Century and 16 restaurants.
Casino will cover 67% of the $70 million development cost and Apsys the rest. This is the largest investment to date by Casino, which has already invested zł. 2.2 billion ($550 million) to complete five hypermarkets and purchase an undisclosed number of sites for further developments.
The Janki investment cost was higher than normal because the developer had to finance the construction of a fly-over for the nearby intersection to ease the currently congested road that puts Warsaw traffic onto a highway to Krakow and Katowice.
Gmina Raszyn said improvement of the intersection was a condition for the developer to get a building permit for the shopping mall. "The local authorities were fairly demanding," said Jarosław M±tkiewicz, director general of Apsys. He added that intersection spending was "a significant portion of the total cost of the project."
While he would not detail the exact cost, M±tkiwicz said it ran from $5 million-$10 million. But there is nothing unusual about this because local authorities often pass infrastructure development costs onto those looking to build, M±tkiewicz said.
Burgess said that low take up this year as well as in the last quarter of last year (almost all of the space taken in 1998 was leased or bought in the first three quarters) was a result of the Russian crisis. "Everyone was depressed six months ago," Burgess said. "Office occupiers did nothing." He added that in the beginning of 1999 such pessimism continued.
But Burgess and others expect the market to quickly bounce back. He added that 1999 take up should equal and perhaps even surpass the 1998 level with the possibility for 250,000 square meters to move.
"There are a number of big tenants looking around," Burgess said. "The second half of the year is going to be very busy."
The rumored move of German financial group Allianz to the Europlex building (Lokale Imobilia June 14) is going to lead the recovery, Burgess said. "They are about to announce this," Burgess said about Allianz, which is believed to be on the verge of taking up to 10,000 square meters in the Europlex on ulica Puławska. Allianz has said it is in negotiations regarding Europlex, but a deal has yet to be finalized.
Allianz could be followed by KPMG which plans to leave the Lim Center and is scouting the market for 6,000 square meters of office space, Burgess said.
In addition, agents at Healey & Baker are looking for space for pension funds, while DTZ Debenham Zadelhoff is eyeing space for delivery giant DHL and French law firm Gide Loyrette Nouel. Both the latter companies are looking for about 1,500 square meters of space. "There are plenty 1,500 square meter deals just waiting to be signed," Burgess said.
Not tallest, but deepest
Telecom giant Telekomunikacja Polska (TPSA) never seems to do anything in a small way. So it may not come as a surprise that even though the company's new headquarters won't be the tallest building in the city, it will be the deepest in the city.
Because of this, TPSA only held its cornerstone ceremony in late June, even thought construction was underway for more than a year. Why? The cornerstone is usually laid at the bottom of the building, and it took builders one year to reach the bottom, said Andrzej Piasecki, chairman of Pia Piasecki, the construction company that is general contractor for the zł. 225.3 million ($58 million) building.
"We know that definitely it would be the deepest building in Warsaw," Piasecki said. The 50,000 square meter building in central Warsaw will be 20 meters deep and will have five underground levels with 300 parking spaces. Above ground, the building on ulica Twarda just behind the Hotel Mercure will be 32 stories or 120 meters tall. That comes up short against the nearby Warsaw Financial Center, which is 140 meters, not to mention the Warsaw Trade Tower, which spirals up 184 meters.
TPSA will use the mammoth structure, planned for completion late next year, for its own activities. "We never planned to lease this building," said Katarzyna Łuczak, a TPSA public relations manager.
The building will host TPSA's headquarters as well as a switchboard capable of handling 60,000 numbers, Łuczak said. She added that the firm decided to put such a large switchboard there because of expected development of the area around the Palace of Culture and Science. And the depth of the building won't be the only thing that makes it unique. There will also be a "leaning" panoramic elevator linking the ground floor with a 28th restaurant floor, Piasecki said. The elevator will go straight up, but at a 13 degree angle from the surface of the building. The idea is to make the building a "tourist attraction," Piasecki said.
Mall opens in August
DT Casino, a French developer in a joint venture with local firm Apsys, in August plans to open the first phase of the $70 million shopping mall Centrum Handlowe Janki, south of Warsaw. The shopping mall, to be located just across the street from the existing Ikea mall, will have 75,000 square meters of retail space. The first phase of the development to be completed in August includes a 14,000 square meter Geant hypermarket, and 80 small shops. Centrum Handlowe Janki is located on 20 hectares and includes parking spaces for 3,000 cars, according to DT Casino. The second phase of the development, which is to be completed by late 2000, will include a 12-screen multiplex cinema to be operated by Ster Century and 16 restaurants.
Casino will cover 67% of the $70 million development cost and Apsys the rest. This is the largest investment to date by Casino, which has already invested zł. 2.2 billion ($550 million) to complete five hypermarkets and purchase an undisclosed number of sites for further developments.
The Janki investment cost was higher than normal because the developer had to finance the construction of a fly-over for the nearby intersection to ease the currently congested road that puts Warsaw traffic onto a highway to Krakow and Katowice.
Gmina Raszyn said improvement of the intersection was a condition for the developer to get a building permit for the shopping mall. "The local authorities were fairly demanding," said Jarosław M±tkiewicz, director general of Apsys. He added that intersection spending was "a significant portion of the total cost of the project."
While he would not detail the exact cost, M±tkiwicz said it ran from $5 million-$10 million. But there is nothing unusual about this because local authorities often pass infrastructure development costs onto those looking to build, M±tkiewicz said.
