The Warsaw office market has proved more resilient to the effects of the pandemic than regional markets. It has slowed down, but its stock continues to grow. At the same time, the interest of tenants in office space of increasingly high quality can be seen.

The economic turmoil caused by the pandemic did not remain without effect on the performance of the commercial real estate sector in Poland. The changes have been particularly hard felt by regional office markets, which said goodbye to the record results they could boast about in recent years. Decreases in the regions are visible, both in terms of the volume of space leased and the volume of space put to use. In the first three months of this year, tenants received more than 40 percent. fewer offices than in the same period last year, and the offer came into the least space for six years. In regional cities, the amount of vacant space is also systematically increasing. The vacancy rate reaches almost 13 percent.

In the Warsaw market, in turn, the most visible is the decrease in the activity of developers. In Warsaw, the smallest number of offices has been created for over a decade. Only a little over 400 thousand square meters of space is under construction, while in previous years about 700-800 thousand square meters were under construction. Nearly half of the offices under construction are to be completed as early as this year.

The demand for the capital’s offices in the last 12 months has decreased by almost a third compared to the previous year. However, interest in renting office space in Warsaw remains at a much higher level than in regional markets. At the same time, it should be noted that the pre-pandemic 2019, when 880 thousand sq m of office space was delivered to tenants, was an absolute record for the Warsaw market in this respect. With such a large new supply and lower absorption of the market, the vacancy rate in the Warsaw agglomeration reaches only 11 percent.

(eurobuildcee.com)