Office Market Warsaw: Vacancy Rate Climbes to 8%

Besides Albania (+0,7%) Poland was the only country in Eastern Europe registering an economic growth in 2009 (+1,7%). The real estate market proved to be resistant to the crisis, however it has to deal with higher vacancy rates at the moment.

Warsaw`s real estate market was not affected as dramatically by the crisis as it was the case in some other Eastern European cities. This has to do with the fact that most of the investors did not lose their confidence in the Polish market because of the good economical performance of the country in the crisis year 2009. However the transaction volume for office spaces decreased by 50% last year, although developers continued constructing. With around
270 000 sqm new office space coming on the market in 2009, there has been more space delivered than in the years before. In the first half of 2010 there were also 130 000 sqm office space finished, until the end of the year there are further 60 000 sqm expected to be delivered. Warsaw`s current office space stock lies at around 3,25 millions sqm.

The high amount of space also lead to an increased vacancy rate. Thus the vacancy rate for office spaces in Warsaw climbed up to 8% in the first half of 2010. This is the highest rate in the past 5 years, although lower than in 2002, when a peak of 16% was recorded. The current rental prices for office spaces amount between 14 and 16 euro per sqm for secondary locations and between 21 and 25 euro per sqm for primary locations. However it has to be noted, that considering the high vacancy rate tenants have a good negotiation range at the moment.