Taurus opens half full; Warsaw retail rents stagnate

The Taurus office building, which opened in Mokotów last week, is already half full, according to DTZ Zadelhoff Tie Leung, the property consultancy marketing the project.

Real estate insiders said that given the tight market conditions and the glut of office space in southwest Warsaw, finding enough tenants to lease half of Taurus' 17,900 square meters is a considerable achievement. "Taking into account the situation on the office market outside the city center, a 50% occupancy rate is a lot (to achieve by the opening date)," said Adam Rejczak, a senior agent at the U.K.-based property consultancy Healey & Baker.

Taurus, part of the Mokotów Business Park (MBP) on ulica Domaniewska, is the latest project by the Globe Trade Center (GTC), a local developer. In a bid to drum up interest in Taurus, GTC lowered the asking rent from $23 per square meter a month to about $20. "(The rent) was too high," Rejczak said. "Now the rent is more realistic and adjusted to market conditions." The service charge is $4.50 per square meter a month.

So far, the biggest tenants in Taurus are TDC, a Danish telecom company that took 3,500 square meters, SAP, a German software producer that will occupy 3,000 square meters, and Boehringer Ingelheim, a German pharmaceutical group that leased 1,550 square meters.

At 110,900 square meters, MBP's nine-phase office park - Taurus, Jupiter, Galaxy, Mercury, Mars, Saturn, Neptun, Sirius, Orion - is Poland's largest. Even so, the developer plans to add one more 19,000 square-meter phase called the "Vega."

Construction on this phase has yet to begin.

Despite its success, the business park does have its critics. "During rush hour, people are stuck in traffic jams (with) more than 1,000 cars traveling in each direction," Rejczak said. "But with ulica Wołoska undergoing an extension, the situation should improve next year." He also said MBP is not attractive for smaller tenants such as consultancies or law firms. "These companies want to keep their identity, which is impossible in such a large complex," he said.

Warsaw not so expensive

New York, Hong Kong, Paris, Sydney and London are the most expensive cities in the world for retail space, according to a November report by Healey & Baker, the U.K.-based property consulting firm.

Hong Kong's Causeway Bay ($5,630 per square meter a year) climbed to the No. 2 position from fifth place in 2000. Warsaw's high streets of Nowy Świat and Chmielna - where at $960 per square-meter for prime retail space remains unchanged - ranked 29th among 43 cities surveyed. Warsaw rents are about eight times lower than those of New York's East 57th Street - the most expensive retail street in the world at $7,535 per square meter annually, the report said. New York and Hong Kong were followed by Paris' Champs Elysees, where annual rents reached $5,322 per square meter ($6,026 last year), Sydney's Pitt Street - $4,131 ($4,803 last year) and Oxford Street in London - $4,087 ($4,263 last year), Healey & Baker said. Rents in Warsaw are similar to rates in Buenos Aires and Prague. Kuwait City, Johannesburg and Bangkok were among the cheapest locations, with rents reaching more than $500 per square meter a year.

In brief:

• Belgian developer Ghelamco Group held a topping-off ceremony last month for its Business Centre Bitwy Warszawskiej project in Warsaw's Ochota district. The building, which will have 22,000 square meters of rentable space, is schedule for completion in March 2002. The seven-floor project will have underground parking for 363 cars. Domestic brewery Żywiec Group took 4,200 square meters in the project in September.

• Israeli investor Plaza Centers last month opened the 20,000 square-meter Ruda Śląska Plaza, a shopping and entertainment center in Upper Silesia's Ruda Śląska. The developer spent $25 million on the project.