H1 11 take-up in Warsaw totaled 320,000 m² and was 46% higher when compared to H110, according to Savills, with non-CBD take-up exceeding 207,000 m².
The international real estate advisor states that average vacancy rates in Warsaw have dipped to 6.2% from 8% over the past 12 months but the most visible decline is seen in non-central locations where vacancy rates are lower than CBD at 5.2%. Within these markets, 42% of contracts signed were new leases compared to 30% in the CBD.
Brian Burgess, Managing Director of Savills Poland, says: "High take-up and limited new supply led to a significant decrease in the average vacancy rate over the last 12 months. This, however, is visible mainly in non-central locations. The share of renewals and renegotiations is still high within the city center, in particular in its core."
Savills report suggests that aside from new leases, lease renewals and renegotiations are a key driver in the office market accounting for 39% in CBD and 23% in non CBD. However, of greater interest perhaps were the pre-let figures which represented 19% and 29% of CBD and non-CBD markets respectively. One deal alone saw TP sign a 43,700 m² lease sign in the South Western Zone.
The healthy demand combined with a low supply of new stock, sees Savills forecast short-term rents to remain stable, with expectations of a rising trend in the medium term. New stock supply figures have increased by only 123,000 m² over the past year, and in H111 have represented only half the level of H210. Although new supply in H211 is forecast to increase, it will still be lower than the four year average.
In terms of rents, non-CBD locations average prices of 15-16/m²/month compared to CBD at 25-28/m²/month. Concessions offered by landlords can see effective rents at 10% below quoting price.