A large number of office deals have been completed in the past few months, illustrating that Polish office markets have entered an upward cycle, according to CBRE Research.
The total volume of leasing transactions in the first half of 2010 amounted to around 223,000 m² which is close than the total for 2009. This increasing trend has been observed since the first quarter of 2009 and is expected to continue into 2011, with take up levels expected to return to 2008 levels. While the average size of deal is around 1000 sq m, the market is dominated by smaller deals.
Showing the overall trend CB Richard Ellis has completed the following significant deals:
- Oracle, the world's most complete, open and integrated business software and hardware systems company, has leased 4,000 m² of office space in Ghelamco's Crown Square, located in Hrubieszowska street in Warsaw.
- Roche, a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics, has leased an additional 1,800 m² of office space in the Echo developed Malta Office Park in Poznan
- Gemius S.A., the largest online research agency in Central and Eastern Europe, have renewed their lease agreement and expanded the space they occupy to 1,700 m² in Heitman's Empark, on Domaniewska street in Warsaw, which was developed by GTC.
- Covidien, a leading manufacturer of medical equipment and pharmaceuticals, have renewed their lease contract for 1,000 m² in the Karimpol developed Mistral, located at Al. Jerozolimskie, which is now owned by Vienna Insurance Group.
- Synopsys, a world leader in electronic design automation (EDA), has leased 1,000 m² of office space in Arkonska Business Park in Gdansk, developed by Torus
- Nokia, the world's leading mobile phone supplier, has leased 900 m² of office space in Millennium Park, located on Ýaryna street, which was developed by Eko Park in Warsaw
- Northern Medical, has leased 850 m² of office space in the Ghelamco developed Trinity Park II in Warsaw, owned by ING REIM
According to CB Richard Ellis Research prime headline rents in Warsaw have stabilized at around 23/m²/month in the city center. In non-central locations the headline rents for the best projects are 15-16/m²/month. Effective rents are generally lower by 15-20% as tenants may still count on the incentives being offered by landlords. Typical incentives include rent-free periods, landlords' contribution to fit-out and other capital costs.
"We expect the rents to remain stable to year end due to current vacancy level. However the limited supply of office space should result in a rental increase in 2011, especially in the city center," commented Lukasz Kaledkiewicz, Director of Office Agency at CB Richard Ellis in Warsaw.
"We are particularly pleased with these recent deals, as it proves global corporate expansion plans and crisis recovery. There is a fundamental change happening, and I think you will see tenant demand continue to change," he added.
Source: CB Richard Ellis