During the first three months of 2020, demand was nearly 139,000 sqm, which almost matched the Q1 performance of last year. The vacancy rate fell by 0.3 p.p., while 770,000 sqm is under construction.
The first quarter of this year, or to be more accurate towards the end of the quarter, was dominated by changes. Companies have temporarily moved their operations online and implemented a remote working model on an unprecedented scale. Adapting to this new reality is a big challenge, but also a powerful boost for technological transformation and optimization of the work model.
Mateusz Polkowski, Head of Research and Consulting at JLL
Home office and office demand? One does not exclude the other
Some lease transactions may be shifted, but it is worth emphasizing that tenant activity remains high. This demand is partly fuelled by the fact that many contracts are coming to an end, and tenants must either renew their agreements or relocate to other office projects. We also predict that the percentage of renegotiations and renewals in the market will increase. In addition, Warsaw is still enjoying the interest of investors, which bodes well for the market in the long term.
Jakub Sylwestrowicz, Head of Tenant Representation, JLL
The first quarter of the year was also interesting with regards to the take-up structure. Tenants again focused their attention on the City Centre and Mokotów, which together accounted for nearly 70% of concluded transactions. While the prestigious central part of the capital will soon offer one of the most spectacular office projects in the CEE region, Mokotów is underpinning its market with scale, attractive rental rates, as well as a constantly improving infrastructure and the diversity of functions present in this area.
Jakub Sylwestrowicz, Head of Tenant Representation, JLL
Supply – Warsaw’s skyline is changing
Some of the completions may be postponed, but this doesn’t change the fact that almost 43% of the 770,000 sqm under construction is already pre-leased. The vast majority of under-construction projects (approx. 80%), are located in the central part of the city. This means that soon we will be dealing with a very limited number of lease options for companies looking for an office in new buildings outside the city centre.
Mateusz Polkowski, Head of Research and Consulting at JLL
Investment market
Total investment volume on the capital’s market exceeded EUR 440 million. Warsaw accounted for eight out of eleven transactions closed during the first three months of this year in the Polish office market.
Tomasz Puch, Head of Office and Industrial Investment, JLL
