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The Warsaw Voice » Real Estate » November 30, 2010
Office Market
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Occupiers More Optimistic
November 30, 2010   
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Erik Drukker, Deputy Managing Director, DTZ

Optimism among occupiers is increasing and decisions regarding relocation are now being considered, albeit with a cautious approach and future flexibility is essential. It is clear that the 8 percent market vacancy in Warsaw is persuading tenants to secure space now in advance of lease events in 2012/13 to take full advantage of incentives being offered on the market. With next year’s supply expected to be 60 percent of that delivered in 2010 (around 190,000 sq m), it is clear that incentives will lessen as available space becomes restricted in key parts of the city.

The first half of 2010 saw a 62 percent increase of take-up on the previous year and stability in rental levels. A wait-and-see approach was still being adopted, but these positive sentiments have continued into H2, demonstrated by 98,000 sq m taken up in Q3, with new large transactions signed by Grupa Aviva, Polimex Mostostal, Oracle and Pfizer. It is estimated that total take-up over 2010 may be around 400,000 sq m, of which 30-35 percent will be renegotiations.

Despite a slow start, activity is increasing in the new projects delivered such as Zebra Tower, New City and Crown Square as more occupiers take advantage of very attractive and competitive terms. These additions to the market have continued to offer the high technical and efficiency standards expected by corporate occupiers, further promoting the Warsaw market as a key base for the region.

The situation is expected to alter next year as supply dwindles. Occupiers will not have the benefit of a wide choice and the situation will start to change as delivery of new supply falls to an expected 100,000 sq m.
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