Number of offices built in Warsaw lowest in the last decade

There are currently approx. 260,000 sqm of office space under construction in the capital, i.e. the least in 10 years, shows data provided by CBRE. According to experts, falling developer activity will result in a supply gap.

"The total office supply in the capital is currently 6.24 million sqm and this number will probably not change much in the near future. Two new investments have been started in Warsaw, but only 260,000 sqm are under construction, which will be put into use by the end of 2024 This is the lowest result in 10 years, which will result in a supply gap. Especially since tenants are extremely active and in the first months of the year the demand reached 273,000 sqm. This is historically the most active first quarter and one of the strongest quarters in history," the CBRE stated.

The vacancy rate in Warsaw offices is falling and is currently at the level of 12.2 percent, i.e. by 0.5 percentage point less compared year to year.

"The historically high demand side activity in the first quarter of this year proves that the pandemic is easing and has not left much traces in the capital's office market. The high demand is partly due to tenants unblocking their real estate decisions, but also due to the unusually high share of transactions. The four largest leases were concluded by banks. In total, the financial sector accounts for as much as 48 percent of demand, which has focused mainly on the center due to the importance of location for financial institutions. The share of renegotiations in office space is also declining: currently it is 27 percent in favor of new lease agreements, including pre-lease agreements, where the share is 25 percent," Paweł Dobrowolski, director of the office space department, summed up.

(ISBnews)