09. Mai 2012     Print Print 

2012 Warsaw retail pipeline stock limited, vacancy rate falling

According to CBRE the 2012 total property investment volume in Poland should remain on a similar level as in 2011. The forecast is based on the number of ongoing investment transactions, which amounted to € 250 million in Q1 2012, and on the number of new inquiries received by CBRE.

“The new infrastructure improvements in Poland, such as ring-roads, highways, the railway and the new Warsaw metro line stimulate property market growth by creating new locations desired by developers in all market segments: office, retail and warehouse. Poland’s economic fundamentals remain strong with impressive GDP, high level of industrial output, strong export and outstanding level of retail sales. In 2012, the major concern for the Polish economy and the country’s property market is the turbulent Eurozone environment fuelled by the budgetary instabilities of many EU economies”, said Colin Waddell, Managing Director of CBRE for Poland.

Office market enjoys stable development
The results of Q1 2012 confirm the stable development of the Warsaw office market. The total take-up in Warsaw reached 125,000 sq m in Q1 2012, 37% lower than in Q1 2011 and 6% lower than in Q4 2011. However, based on the number of inquiries received by CBRE, the take-up should speed up and reach the level comparable to last year. The largest leases registered in the first quarter included the pre-let by the ING Group in Plac Unii and an owner-occupation of Jeronimo Martins, both of them in Warsaw.

At the same time, the supply has been growing rapidly. The office stock in Warsaw increased by 48,000 sq m in Q1 2012 to reach over 3.6 million sq m. The vacancy rate went up in the last quarter to the level of 7.3% on average. However, CBRE expects the demand for office space to be sustainable in the coming years, which should cause the newly developed space to be gradually absorbed.

Other large regional markets also perform quite well. A number of foreign investors plan to open or expand their shared service projects. In the first quarter of 2012, the total regional take-up was estimated at over 100,000 sq m, with the Tri-City and Krakow enjoying strong popularity. This, combined with relatively slower construction activity in the regional cities translated into low vacancy rates, particularly in Wroclaw (5%) and Tri-City (7%).

Prime headline rents are slowly increasing in Warsaw Central Business District (now at € 26 – 27/sq m/month), while in other locations remain stable. Growing demand in the most established office destinations might exert a further upward pressure on prime level rents in 2012, particularly in such cities as Krakow and Wroclaw.