Signs of recovery on Poland's commercial real estate market

2009-11-17



The first signs of an upturn were visible on Poland's retail, office and warehouse space markets in the third quarter of 2009, according to a report prepared by CB Richard Ellis (CBRE).
Warsaw's retail space market remains stable. In spite of the crisis and the withdrawal of unremunerative retail brands from the market investors are still seeking attractive locations for new ventures. Nevertheless, CBRE analysts see little chance of new retail investments being built in the immediate future. On the other hand, existing shopping centres and malls have been competing with each other by, among other things, coming up with new ideas for promotions or launching new brands on the Polish market.
Interest in office space in the capital has been growing with each quarter. During the period under discussion demand reached 75,000 m², which translates into a jump of 19% vis-a-vis Q2. Simultaneously, it should be stressed that roughly one quarter of all signed leasing contracts are renegotiations, which is thus not translated into a greater volume of new space for rent. The last few months have seen only a small number of projects under construction, which is a continuation of an earlier trend. As a result, only around 200,000 m² of new offices will be completed in 2010, and even fewer are projected for 2011. This in turn will squeeze the supply of free space and thus trigger a spike in rents.
On the warehouse market signs of slow recovery were also noticed. In the first nine months of 2009 a total of 698,000 m² of warehouses were leased out to tenants, which came as a slight surprise to specialists bearing in mind the current constraints on direct investment in Poland. Developers have put the shackles on new market projects and focused instead on seeking tenants for already existing real estate rather than build new units. Currently only 139,000 m² of such stock is under construction in Poland, with no new investments located in Warsaw.

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