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The Warsaw Voice » Business » May 23, 2014
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Developers may face pressure from falling rents and excessive supply
May 23, 2014   
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Commercial real estate developers enjoy a stable situation for now but may face pressure from falling rents and increasing supply of unused space, central bank NBP analysts wrote in a report on the real estate market.

"Potential rent reductions and an increase in the rate of vacant retail and office space may translate into declines of incomes of owners of particular commercial properties," the report reads. "If owners took out loans to buy those properties, they may have problems with servicing them."

Problems of select players may affect the entire market, NBP wrote.

Q1 on the commercial real estate market brought continuation of transaction volume growth to over EUR 900 million (vs. EUR 500 million in Q1 2013) but the bulk of the deals pertained to ownership changes of existing, leased-out buildings, NBP said.

Capitalization rates in Q1 on the retail and office market decreased slightly in Q1 to around 6% from around 7% in Q4 2013.

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