|
The Real Estate Voice Unstoppable Office Market
Real estate news By Warsaw Voice
3 October 2007
Warsaw's office space boom showed no signs of abating during the first half of the year, according to a report by international real estate services company DTZ. The city had almost 2.65 million sq m of office space at the end of June. This figure includes the 139,900 sq m that came online during the period, of which almost 63 percent, or 88,000 sq m, lies outside the city center. Warsaw will gain an additional 66,500 sq m of office space during the second half of 2007 according to DTZ. This would bring the year's total to 206,400 sq m, the highest since 2002.
If all planned projects are completed on time then DTZ estimates a record 470,000 sq m to come onto the market during 2008. This will give Warsaw a stock of 3 million sq m of which 365,000 sq m will lie outside the city center. The volume of lease transactions, excluding renewals, stood at 232,600 sq m during the first half of 2007. This is an increase of 34 percent over the same period last year. Almost 36 percent (83,500 sq m) was leased in central locations. More than 74,300 sq m was leased in the "upper south" zone compared with 73,900 sq m for the whole of 2006. The overall figure for 2007 is expected to exceed 400,000 sq m, the highest figure ever.
DTZ forecasts that office demand will increase next year but not to unsustainable levels. Warsaw had a vacancy rate of 4.03 percent at the end of Q2 2007 compared with 3.81 at the end of Q1. This slight rise can be attributed to the increase in supply, most of which was outside the city center as was the case in the previous quarter. Supply is not expected to satisfy demand over the next six to 12 months and so vacancy rates are expected to remain stable or even taper off slightly (3 or 4 percent). There should be 8 or 9 percent more office space outside the city center in 2008 once several new projects are completed. Prime headline rents continued their upward climb in central locations reaching 28-30 euros per sq m per month. Rents remained relatively stable at around 15-16 euros outside the city center. Rents can vary between 20 and 23 euros in the city center and 13 to 14 euros elsewhere.
Send tips or a Letter to the Editor to editor@updatere.com
|
