Colliers published the ExCEEding Borders Office Snapshot report, which summarized key market performance for the first quarter of 2020 for 14 CEE capitals. The total modern office stock in the 14 CEE capital cities at the end of Q1 2020 reached almost 26.4 million sqm. In Q1 2020, developers completed over 288,000 sqm, with more than 3.6 million sqm currently under construction and due for delivery over the next 2-3 years.
The largest supply of modern office space in the region is recorded in Warsaw (5.6 million sqm), Budapest (3.7 million sqm) and in Prague (3.7 million sqm). The largest increase of new supply in Q1 2020 was noted in Bucharest (78,000 sqm) followed by Belgrade (48,000 sqm), and Budapest (45,560 sqm). The largest amount of modern office space under construction at the end of Q1 2020 was in Warsaw (792,800 sqm), Budapest (582,000 sqm) and Bucharest (380,000 sqm).
For the take-up trend in annual terms only Riga and Bratislava recorded an increase. Take-up activity in Warsaw, Prague, Kyiv, Tirana and Bucharest decreased.
“The COVID-19 pandemic undoubtedly influenced the office market in Poland. The situation in the world is uncertain and changes every day, therefore in many companies the decision-making processes are getting longer. However, those tenants who are just finishing their lease agreements are forced to make certain steps, therefore many transactions are still ongoing. This year and next we can certainly expect an increase in the number of renegotiations, which so far have accounted for only 33 percent of lease agreements in Poland. Due to the current situation, tenants focus mainly on cost optimization and perceive relocations only in terms of potential savings. The pandemic has certainly contributed to a change in the approach to remote working. According to surveys conducted by Colliers, most people would like to work from home 1-2 days a week after the pandemic. However, many of them cannot imagine working without direct interaction with their colleagues - during meetings or coffee breaks. As a result, the function of the office will change,” Paweł Skałba, senior partner, director of Office Agency at Colliers International, said.