According to Walter Herz report, analyzing 500 office buildings in Warsaw, rental rates for leasing space in class A office buildings in Warsaw are on average over 30 per cent higher than in class B office buildings
The report includes a detailed description of the resources currently available on the Warsaw office market, illustrating its potential. – It includes comprehensive data on the asking rental rates and operating costs in the individual office buildings in Warsaw, as well as the factors that affect their amount in correlation with the location, area, date of completion, class of the buildings and certificates. In addition to the in-depth analysis of the offer of facilities located on the Warsaw market, the publication includes maps presenting the density of space available in the individual districts – informs Bartłomiej Zagrodnik, Managing Partner at Walter Herz.
The study provides detailed knowledge about the office offer in the Warsaw agglomeration, which currently offers 5.65 million sq m. of modern office space. According to Walter Herz estimates, over 850 thousand sq m. of office space will be delivered in Warsaw in the next 2-3 years. Most of the large investments that remain under construction are concentrated in the central part of the city, and most of them are being built at the intersection of Prosta and Towarowa Streets near Daszyńskiego roundabout.
At the same time, the deficit of attractive land in the central part of Warsaw stimulates the process of replacing older buildings with modern office facilities. Warsaw office market has never been more popular. The demand for the capital offices is twice as large as the new offer from developers. Market absorption is so high that the vacancy rate dropped in Warsaw to the level of 8.6 per cent, reaching the lowest value in 7 years. Moreover, it is still dropping, because the construction of the most projects currently under way is to last over a year. The shortage of new supply means that average rental rates are slowly going up. The increase is also influenced by the demand for offices, unprecedented in the history of the Warsaw market. The average value of rental rates is also affected by the quality of the commissioned space. As indicated by the data collected in the Walter Herz report, in Warsaw class A and A + office buildings, which are now primarily entering the market, prices for leasing are 30.7 per cent higher than in class B and B + facilities.
In addition, most of the office buildings commissioned in recent years are certified buildings. In such projects, according to the study, operating fees are admittedly around 5 per cent lower, but rental rates are 13 per cent higher than in the non-certified office buildings. Older buildings, which usually offer a lower standard than the new ones, are characterized by lower rental rates, but considerably higher operating costs.
Walter Herz analysts predict that prices for leasing office space in Warsaw will continue to maintain the upward trend in the near future. The good economic situation in our country and FTSE Russell classifying Poland as a developed country raises the interest of Western and global companies in our market. This, in turn, translates into an increase in interest in leasing office space in the largest office centers in the country and, consequently, an increase in rental rates, which is particularly true for the most attractive, architecturally unique buildings.
