At a glance Q1 2017 Office Market in Warsaw...Prime office buildings located in non-central business...
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1 RESEARCH Real Estate for a changing world 4 OFFICE AS AN IMPORTANT HR TOOL Recruiting and retaining qualified staff in Warsaw as well as other regional cities has become a hot topic for many companies. Providing suitable office accommodation, equipped with appropriate amenities, attractive working environs as well as convenient public transport is of pivotal importance to recruit and retain talent. Landlords are therefore having to implement solutions to deliver creative layouts, eco-design elements and modern technology, all aimed at managing employees’ well-being in order to offer occupiers sustainable workspace. 2 UNPRECEDENTED HIKE EXPECTED WITHIN WOLA AND WEST OF ŚRÓDMIEŚCIE DISTRICT OVER THE NEXT THREE YEARS As much as 890,000 sqm is currently under construction, over 60% of which is located in Wola and to the west of Śródmieście district. More projects are in the planning phase beyond 2020, which will further strengthen this area as a major business and service district. The hike in supply is due to the established master plan in place for the majority of the area as well as good public transport network, significantly improved after the opening of the second metro line. Occupiers show strong interest in this area, which is supported by the highest take-up recorded this quarter. . 1 SIGNIFICANT DIFFERENCES OF VACANCY RATES BY CLUSTER AND BY BUILDING AGE While the average vacancy rate has been relatively stable over the last quarters (14-15%), there are significant differences when viewing by cluster and age of stock. BNP Paribas Real Estate forecasts the vacancy to increase by 1-2 p.p. over 2017/18. The area of Służew Przemysłowy (part of Upper South) as well as central districts have recorded the highest vacancy rates of 17-19%, whereas the lowest availability was North and East of the centre. When considering building age, schemes delivered after 2010 enjoy the highest occupancy of around 90% on average. These trends are likely to continue over 2017. As much as 83,000 sqm were completed in the first quarter of 2017, bringing the overall stock to 5.26 million sqm. The market will expand further with approximately 890,000 sqm currently under construction with delivery scheduled for between Q2 2017 and 2020. Given such a volume of pipeline supply, tenants will continue to be in a strong negotiation position. off the headline rent for effective rate At a glance Q1 2017 890,000 m 2 Office Market in Warsaw 3 VARYING HEADLINE AND EFFECTIVE RENTAL RATES A few prime schemes in the city centre continue quoting €20-22 per sqm/month, yet the majority of centrally located but more mature projects face very strong competition. The average city centre headline rates dropped by 3-5% over the previous year and are currently in the range of €16-18 per sqm/mth. Prime office buildings located in non-central business clusters quote €14.00-15.00 per sqm/mth, but the average headline rates in these areas range from €11.00-13.00 per sqm/mth. Large occupiers (over 2,000 sqm), irrespective of location can expect to receive good incentive packages which can result in effective rates 20-30% lower than headline rates. Vacancy rate as of Q1 2017 14.5% Under construction 20-30%
Transcript of At a glance Q1 2017 Office Market in Warsaw...Prime office buildings located in non-central business...
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Real Estatefor a changing
world
Real Estatefor a changing
world
RESEARCH
1
Real Estatefor a changing
world
RESEARCH
Real Estatefor a changing
world
4OFFICE AS AN IMPORTANT HR TOOL
Recruiting and retaining qualified staff in Warsaw as well as other regional cities has become a hot topic for many companies. Providing suitable office accommodation, equipped with appropriate amenities, attractive working environs as well as convenient public transport is of pivotal importance to recruit and retain talent. Landlords are therefore having to implement solutions to deliver creative layouts, eco-design elements and modern technology, all aimed at managing employees’ well-being in order to offer occupiers sustainable workspace.
2UNPRECEDENTED HIKE EXPECTED WITHIN WOLA AND
WEST OF ŚRÓDMIEŚCIE DISTRICT OVER THE NEXT THREE YEARS
As much as 890,000 sqm is currently under construction, over 60% of which is located in Wola and to the west of Śródmieście district. More projects are in the planning phase beyond 2020, which will further strengthen this area as a major business and service district.The hike in supply is due to the established master plan in place for the majority of the area as well as good public transport network, significantly improved after the opening of the second metro line. Occupiers show strong interest in this area, which is supported by the highest take-up recorded this quarter.
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1SIGNIFICANT DIFFERENCES OF VACANCY RATES BY
CLUSTER AND BY BUILDING AGEWhile the average vacancy rate has been relatively stable over the last quarters (14-15%), there are significant differences when viewing by cluster and age of stock. BNP Paribas Real Estate forecasts the vacancy to increase by 1-2 p.p. over 2017/18.The area of Służew Przemysłowy (part of Upper South) as well as central districts have recorded the highest vacancy rates of 17-19%, whereas the lowest availability was North and East of the centre. When considering building age, schemes delivered after 2010 enjoy the highest occupancy of around 90% on average.These trends are likely to continue over 2017.
As much as 83,000 sqm were completed in the first quarter of 2017, bringing the overall stock to 5.26 million sqm. The market will expand further with approximately 890,000 sqm currently under construction with delivery scheduled for between Q2 2017 and 2020. Given such a volume of pipeline supply, tenants will continue to be in a strong negotiation position.
off the headline rentfor effective rate
At a glance Q1 2017
890,000 m2
Office Market in Warsaw
3VARYING HEADLINE AND EFFECTIVE RENTAL RATES
A few prime schemes in the city centre continue quoting €20-22 per sqm/month, yet the majority of centrally located but more mature projects face very strong competition. The average city centre headline rates dropped by 3-5% over the previous year and are currently in the range of €16-18 per sqm/mth. Prime office buildings located in non-central business clusters quote €14.00-15.00 per sqm/mth, but the average headline rates in these areas range from €11.00-13.00 per sqm/mth.Large occupiers (over 2,000 sqm), irrespective of location can expect to receive good incentive packages which can result in effective rates 20-30% lower than headline rates.
Vacancy rate as of Q1 201714.5%
Under construction
20-30%
AT A GLANCE - OFFICE MARKET IN WARSAW - Q1 2017
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Source: BNP Paribas Real Estate, f - forecast
Office Snapshot
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Annual office supply
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Vacancy ratein %
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existing forecast
Annual office take-up
Source: BNP Paribas Real Estate, f - forecast
Source: BNP Paribas Real Estate, f - forecastSource: BNP Paribas Real Estate, f - forecast
€ 10.00€ 12.00€ 14.00€ 16.00€ 18.00€ 20.00€ 22.00€ 24.00€ 26.00€ 28.00€ 30.00
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AT A GLANCE - OFFICE MARKET IN WARSAW - Q1 2017
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SUBZONESRAILWAYEXISTING METRO LINE METRO LINE UNDER CONSTRUCTIONAIRPORT LINE
LEGEND
CoreCity CentreNorthEastWestUpper SouthSouth EastLower SouthSouth West
CCCNEWUSSELSSW
EXISTING SUPPLY (m²)
250,0000 500,000 750,000 1,250,000 1,500,0001,000,000
Major pipeline schemes, 2017-2019
Major office lease transactions, Q1 2017
Project Office area (sqm) Subzone Developer Year plannedVarso 120,000 Core HB Reavis 2020
Warsaw Hub 75,000 City Centre Ghelamco 2019
Skyliner 45,000 City Centre Karimpol 2018
Mennica Legacy Tower 65,500 City Centre Golub GetHouse 2018
West Station II 34,200 South West HB Reavis 2017
D48 24,500 Upper South Penta Investments 2017
Bobrowiecka 8 24,400 South East Castor Park 2018
Equator IV 21,000 South West Karimpol 2018
Proximo II 20,500 West Hines 2017
Generation Park X I 20,000 City Centre Skanska 2017
Koneser 20,000 East BBI Development NFI 2017
Tenant Sector Building Subzone Area leased (sqm) Type
AstraZeneca Pharma Postępu 14 Upper South 13,200 Renewal and extension
Citi Service Center Poland FIRE Generation Park City Centre 13,600 New
Lux Med. BS Myhive Park Postępu Upper South 9,500 Renewal and extension
Diebold Nixdorf BS West Station II South West 9,800 Pre-let
Public Transport Authority Public JM Tower City Centre 7,300 Renewal
confidential Public G9 West 7,200 New
Source: BNP Paribas Real Estate
Source: BNP Paribas Real Estate,
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WARSAW OFFICE SUBZONES
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SUBZONESRAILWAYEXISTING METRO LINE METRO LINE UNDER CONSTRUCTIONAIRPORT LINE
LEGEND
CoreCity CentreNorthEastWestUpper SouthSouth EastLower SouthSouth West
CCCNEWUSSELSSW
EXISTING SUPPLY (m²)
250,0000 500,000 750,000 1,250,000 1,500,0001,000,000
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SUBZONESRAILWAYEXISTING METRO LINE METRO LINE UNDER CONSTRUCTIONAIRPORT LINE
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CoreCity CentreNorthEastWestUpper SouthSouth EastLower SouthSouth West
CCCNEWUSSELSSW
EXISTING SUPPLY (m²)
250,0000 500,000 750,000 1,250,000 1,500,0001,000,000
EN
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SUBZONESRAILWAYEXISTING METRO LINE METRO LINE UNDER CONSTRUCTIONAIRPORT LINE
LEGEND
CoreCity CentreNorthEastWestUpper SouthSouth EastLower SouthSouth West
CCCNEWUSSELSSW
EXISTING SUPPLY (m²)
250,0000 500,000 750,000 1,250,000 1,500,0001,000,000
New office suply, Q1 2017Scheme Office area (sqm) Subzone DeveloperBusiness Garden III - VII 54,800 South West Vastint
Equilibrium 9,100 West Waryński
Grójecka Offices 7,400 South West Okre DevelopmentSource: BNP Paribas Real Estate
AUTHORAnna Staniszewska Head of Research & Consultancy CEE [email protected]
CONTACTSErik Drukker Managing Director, Agency & Valuation CEE [email protected]
Michael Richardson MRICS Director, Corporate Solutions CEE [email protected]
Małgorzata Fibakiewicz MRICS Director, Head of Office Agency [email protected]
Izabela Mucha MRICS Head of Valuation CEE [email protected]
Patrick Delcol Managing Director, Capital Markets CEE [email protected]
BNP Paribas Real Estate Poland Sp. z o.o.
al. Jana Pawła II 25, 00-854 Warsaw, Tel. +48 22 653 44 00
www.realestate.bnpparibas.pl
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Real Estatefor a changing
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