CI: office market to change at year-end

2010-03-05

End of 2010 will usher in changes on the office space market, first in Warsaw and then in regional markets, according to a report released by Colliers International (CI).
In the opinion of CI’s analysts, the office space market has been experiencing a small boom in Warsaw since Q3 2009. Last year, approx. 266,200 m² of modern offices were completed in Warsaw, increasing total stock of office space in Poland’s capital to over 3.2 million m². The current year might well bring changes among market players; owners and developers erecting office buildings may be less inclined to offer discounts or accept amends in contracts sought by lessees. Today, among office investment planned for this coming year, only ca. 60,000 m² is under construction. This will mean a supply shortage in 2011, which in turn will likely lead to higher lease rates for office space. Thus, today companies which had earlier downsized how much space they lease are now interested in enlarging their floor space and want to return back to office lease negotiations suspended last year. In 2010 lease renegotiation may account for 20-30% of all transactions executed on the market. The situation on the regional markets will be varied and dependent on availability of office space as well as interest in a given municipal centre – both among developers as well as potential lessees. In the opinion of CI’s analysts, new investment on the office space market will be initiated only when pre-leases are signed for most office space in to-be-erected buildings.

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