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The Warsaw Voice » Real Estate » March 29, 2012
The Real Estate Voice
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New Office Center Emerging in Warsaw
March 29, 2012   
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Warsaw is second in Europe in terms of the number of office buildings currently under construction. The majority of the new projects are being built or planned in the Wola district.

According to the Poland Office Destinations 2012 report published by CBRE, developers and tenants alike were active on the Polish market over the past year, despite the uncertainty caused by the economic situation on global markets. At the start of 2012 there was almost 6 million square meters of modern office space in Poland’s nine biggest cities, including 252,000 sq m completed last year. Warsaw continues to be the largest and most active market, with almost 3.6 million sq m. Next on the list are Cracow (540,000 sq m), Wrocław (400,000 sq m) and the Tricity of Gdańsk, Sopot and Gdynia (380,000 sq m).

As a consequence of the slowdown and economic crisis in 2009 and limited access to funding for projects, only a few projects were finished in 2011. Encouraged by growing demand, however, developers began pressing ahead with projects that they previously put on hold and even started new ones, both in Warsaw and regional cities. There is currently more than 1 million sq m of modern office space under construction all over Poland. Though Warsaw may be the biggest and most developed market in Poland, it is still at an early stage of development compared with other European cities such as Paris (which has 54 million sq m available), London (Central London 20 million sq m), Munich (20 million sq m), Milan (12 million sq m) and Vienna (10 million sq m).

Though it’s hard to compare Warsaw with the big cities of Western Europe in terms of supply, CBRE emphasizes in its study that Poland’s capital is second in Europe in the number of sq m of office space under construction in or planned for 2012/2013. According to CBRE’s data, around 700,000 sq m of office space will be completed in 2012-2013 in Warsaw. “Considering the number of inquiries from new as well as existing companies, we expect demand for office space to remain high in both Warsaw and across Poland,” says Łukasz Kałędkiewicz, CBRE’s director for office space.

Wola attractive to investors
Many new office projects can be expected to begin in Warsaw over the next few years. As regards the location of new office buildings, the Wola district could become one of the main areas of expansion.

According to analysts from the Emmerson company, this is a very likely scenario for several reasons. The first factor is the high concentration of office space in the Central Business District, a location that due to high land prices will no doubt become an area of large and extremely spectacular office projects. Relatively high rents there could mean that tenants searching for office space close to downtown Warsaw but at a more affordable price will look to Wola, with its convenient location, as their second choice.

In several years, this part of Warsaw will gain a substantial asset in the form of a second metro line, currently under construction. Even though the central section of this line is unlikely to be completed by October 2013 as originally planned, the metro is what makes investors turn their eyes toward this part of Warsaw. Also, unlike other districts, Wola has quite a few plots still available for development. Warsaw cannot develop southward because Kabacki Forest stands in the way, nor northward because of the Bielański, Młociński and Kampinoska forests. There’s one more factor that explains why investors are interested in Wola. Large plots of land formerly occupied by postindustrial facilities are available there.

Today the Wola district has almost 220,000 sq m of modern office space, with another 65,000 still under construction. Projects currently planned by developers total almost 85,000 sq m. The largest number of office buildings are in areas neighboring the central ¦ródmie¶cie district. However, it can be expected that developers planning office projects in this part of the capital will prefer to choose locations close to future metro stations.

Better transport links thanks to this kind of location will have a significant impact on the attractiveness of individual projects. Consequently, it is possible to assume that in the future the main reference point for new office projects will be Górczewska Street, along which the metro will run. Today the main areas of concentration for office projects are those close to future metro stations Rondo Daszyńskiego and Wolska, which is the area around Kasprzaka and Przyokopowa streets.

Several new skyscrapers will appear in Wola’s cityscape in the next few years. One of them was even meant to be the tallest building in Europe, but the prospects for building this almost 300-meter high-rise at the corner of Chmielna and Miedziana streets have become slim. The building, whose investor is Kulczyk Silverstein Properties owned by one of Poland’s richest people, Jan Kulczyk, was originally expected to be 282.4 meters high—almost 52 meters taller than the Palace of Culture and Science, the tallest building in Poland, and 24 meters taller than Europe’s highest skyscraper, the Commerzbank Tower in Frankfurt. With a space of close to 81,000 sq m, it was to house a complex of service outlets, hotel rooms, apartments and garages.

The start of the project was planned for 2009 but air traffic safety considerations turned out to be a problem. According to the regulations in force at the time, buildings taller than 130 meters were not allowed in the region of Zawiszy Square where Kulczyk’s skyscraper is planned. The area was part of Okęcie airport’s protective zone. Though the regulations changed recently, the investor has yet to receive a construction permit. The project is due to begin next year, but the skyscraper will not be as tall as originally planned.

In the future the area where the Kulczyk skyscraper will be built is set to become Warsaw’s “Manhattan.” Developers have taken a liking to the area as the location for tall buildings. A few years ago Spanish developer Torca acquired a large plot on Towarowa Street (with the Jupiter shopping center, among other buildings), aiming to build 200-meter high-rises there. Warsaw officials recently issued a land development decision that allows Torca to build two high-rises, 170 meters and 130 meters tall.

Innovative office centers
One interesting project is in an area bounded by Grzybowska, Przyokopowa and Karolkowa streets. This is the Warsaw Business Centre (WBC), which is due to become the biggest business complex in downtown Warsaw. WBC is the joint initiative of developers active in this neighborhood; their aim is to create a business center offering a new quality, with a coordinated supply of diverse office space and a broad range of services and facilities that are difficult to include in a standard business center based on separate office buildings standing in one place, often with no cooperation among competing developers.

Instead of competing among themselves for tenants, the partners forming the WBC will offer them an attractive, quality alternative to what is offered by other office locations in Warsaw. Despite a varied range of office spaces, the WBC is being advertised as an integrated business center, as if it belonged to a single developer.

The center will offer tenants integrated services unavailable in other office buildings in downtown Warsaw, such as central parking space management, central electricity and heat purchases (leading to utility savings of 20-30 percent), central security service and access to parking spaces via a system of jointly maintained internal roads. The WBC will be Warsaw’s only business center where 7,000-8,000 employees will have access to such a wide range of coordinated services (also in terms of location). The WBC will include a pharmacy, delicatessen, post office, at least two bank branches, a laundry, beauty salon, newsstand, fitness club and all kinds of restaurants and cafes, and probably also a preschool.

The WBC cityscape will be dominated by the 55-meter glass Concept Tower, a project by the Concept Development Group. The Concept Tower will be Poland’s first office building submitted for double BREEAM and LEED certification (the most important green building evaluation systems). “The Concept Tower will be one of the capital’s most advanced office buildings,” says Rafał M. Maresch, chairman of the board at Concept Development. “The prestigious double certification will add even more value to the building, which automatically translates into measurable benefits for investors and tenants. These include increasing the property’s real value, improving the attractiveness of space for rent, and maintenance cost optimization.”

Green solutions used in the building include low heat consumption thanks to windows and facades with high thermal insulation parameters, a system of external blinds protecting tenants from excessive heat in the summer, advanced air conditioning with individual temperature and humidity control, maximum daylight access, using certified local materials—raw and recycled, a waste sorting system, energy-saving lighting with motion sensors, facilities for cyclists and green terraces for tenants on three floors.

This, together with the Concept Tower’s 8,845 sq m of office and retail space on 15 stories, will ensure tenants comfortable work conditions in environmentally friendly surroundings. The building’s functional division into different zones means a low share of common space—only about 4 percent. A modular structure will enable the space to be split into small offices (from 150 sq m) or whole stories to be left in an open-plan arrangement. Each tenant will be able to arrange their rented space according to their individual needs. Completion of this office building is planned for the fourth quarter of 2012.

Another huge and modern office complex is being built nearby: the Warsaw Spire, a project by Ghelamco. The Warsaw Spire is an unusual architectural design and also one of the biggest office projects under construction in Europe. The complex comprises a skyscraper of 220 meters and two 55-meter buildings next to it. In total, these will provide the Warsaw market with about 100,000 sq m of modern, top-class office space. The 48 stories of the 220-meter building will have about 60,000 sq m of space for rent, and the two 20-story buildings flanking it will each have 20,000 sq m of modern office space. There will be a five-level parking garage for 1,200 cars underneath the complex.

The Warsaw Spire is special not just due to its architectural form, location and advanced technology, but also a new approach to arranging urban space. The areas between the buildings will form a courtyard accessible to all, filled with greenery, small architectural features, fountains, restaurants and stores. This design will be the first arrangement of its kind in such a large office complex in Warsaw located in the city center. Construction of the complex began in mid-2011 and the planned completion date is 2014.
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