2017 was a very good year for all sectors of the real estate market, with a large number of office projects delivered across Poland filling up quickly as occupier demand remained robust, according to Bolesław Kołodziejczyk, Head of Research & Advisory in Cresa Poland. “Traditional drivers of demand were joined by emerging trends that are shaping the future of the office market and commercial real estate as a whole,” Kołodziejczyk said.
London’s position as Europe’s financial center has been jeopardized by the Brexit. In response, large companies are looking at moving some of their UK-based operations to the continent, Kołodziejczyk notes. “The departments which are maybe not the most strategic, but employing a lot of staff are relocated also to Poland,” he says, noting the best example is the investment bank JP Morgan that decided to lease office space in Poland for 2,500 people, and other market players have followed. UBS Group and Goldman Sachs Group have smaller branches, but are also considering expansion in Poland.
The London Stock Exchange group is looking to rent 6,500 sqm of offices in Bucharest that would host some 500 analysts, after also analyzing Sofia and Warsaw, Ziarul Financiar reported. The move has been confirmed by both real estate and financial consultancy sources.
Occupiers’ increasing demand
Demand for Polish office space has been so strong that each modern office building was delivered with a large chunk of its space (over 50% and an average of 60%) pre-let.
Development is powering the Polish office rental market. During the first three quarters of 2017 in Warsaw, 205,000 sqm of offices for rent were delivered, and supply for the whole of 2017 is predicted to exceed 300,000 sqm. Regional markets also reported robust growth in space delivered. Still yet to hit the rental market are such large developments as the Warsaw HUB, the Skyliner, and Mennica Legacy Tower.
“Occupiers are expected to take advantage of the strong competition in the development market and demand favorable lease terms. The overall outlook for the Polish office market for 2018 remains firmly positive,” Kołodziejczyk notes.