Savills expects over 5.7 mln sqm of new European office space to be completed in 2022

According to Savills latest research, over 5.7 million sqm of new office space will be completed in Europe in 2022, of which 49 percent is currently prelet. In Warsaw, Savills forecasts that a rebound in demand and an undersupply of new office stock will translate into visibly shrinking availability.

A further 5.1 million sqm of space is scheduled for 2023, of which 23 percent is already prelet. In total over the next two years, this marks a 43 percent increase per annum on the average level of completions over the previous five years. However, rising construction costs as well as shortages of materials and labor are adding pressure to supply chains and delaying some office completions. 

Office leasing activity in Warsaw amounted to 273,200 sqm in the three months to March, one of the best-performing quarters in the history of the capital. At the end of March 2022, there was 323,800 sqm of modern office space under construction. Occupier activity in recent months was largely driven by the public sector as well as financial services and IT companies which accounted for 42 percent of the total office take-up in Warsaw.

“Rising construction and fit-out costs and a rise in utility charges are some of the challenges facing the Polish office market. At the same time, more and more employees are returning to the office and companies are resuming lease decision-making and looking for a head office for years ahead. Despite the Covid-19 pandemic, which affected the pace of growth of the office market, developers in Warsaw are gradually trying to return to their pre-pandemic levels of activity. The Warsaw Municipality issued six planning permissions between January and December 2021. And more importantly, seven new applications were received by the Warsaw City Hall during that time,” Karol Grejbus, Associate Director, Tenant Representation, Office Agency, Savills Poland, commented.

(WBJ)