Polish office stock totals 11.3 million sqm in H1

by   CIJ News iDesk II
2020-08-05   09:22

Office stock in Poland amounted to just over 11.3 million sqm at the end of June, with Warsaw the undisputed leader, followed by Krakow, according to Axi Immo. During the first six months of the year, tenant activity reached 667,800 sqm, with new contracts accounting for more than half of the take-up. Despite limited new supply (275,700 sqm in H1), the vacancy rate increased to 7.9 percent (+40 bps q-o-q) in Warsaw and 10.2 percent (+70 bps q-o-q) in regional markets as at the end of Q2, according to Axi Immo. “During the first half of 2020, we observed trends on the Polish office market, which will most likely stay with us over the next few months. The first one is the fast-track adoption of remote working, which in many companies should remain permanent as part of a hybrid model. Due to the new situation on the market, some tenants no longer occupy their space in full and are therefore considering subletting it to other entities. This solution could help them cut costs. According to our estimates, space currently on offer in Warsaw on a sub-let basis accounts for approximately 1 percent of this market’s total stock,” said Martin Lipinski, head of the office agency and tenant representation at Axi Immo. “Many companies may reconsider whether to lease one large office or several smaller ones. In the second half of the year, we expect a reduction in new supply. Moreover, a large amount of space available through sub-letting signals an impending rise in the vacancy rate. A possible consequence of this situation will be increased pressure from tenants to reduce headline rents.”