Hot spot

Glass tower - south east

The south-eastern quarter of the ONZ Roundabout was notably undeveloped for 50 years. In the summer of 2002 all rights to that site were acquired by Hochtief Project Development, who commenced construction work one year later on the Rondo 1 complex. Hochtief proposed a high, almost 200 metres tall, glass tower, with a total space of 75,000 sqm (55,000 sqm office and 3,000 sqm retail space). The architecture was designed by SOM (tower) and AZO (parking building). Construction by Hochtief Polska is to conclude in late 2005. Piotr Stark, Hochtief Project Development Marketing Manager remarks: "We have a lease contract signed with supermarket (Ahold, 1,000 sqm) and parking operators (Parking Polska, 500 vehicles). Negotiations are continuing with tenants of office space, while letters of intent have been signed with retail space tenants (boutiques addressed mainly at persons employed in the building)". The question must arise whether the risk of undertaking such a large and expensive investment (around USD 200 mln) without concluding at least a few contracts of lease is not excessive. Piotr Stark thinks work is proceeding to the pre-set plan. The decision to start construction was not put forward due to the competitive project presented by Skanska situated on the other side of the ONZ Roundabout. But how is Hochtief tackling the issue of filling this building? "Even should no large foreign companies appear in Poland in the immediate future, I am counting on the structure of the tenants market to change. The smallest firms will move from apartments to the cheaper offices, companies from the city outskirts will appear in the city centre. The best of these will become our clients", comments Piotr Stark, adding that tenants will be looked for among firms in the financial, insurance and consultancy sectors. The developer hopes that his glass tower Rondo 1 will be given the address of ONZ Rondo 1 and expects it to rise above ground level soon. When work is concluded and all space occupied, 6,000 persons will find employment in this office building.

Another perspective - north west

Skanska Property Poland wants to construct a group of office buildings called Rondo City on the opposite side of the ONZ Roundabout. Jarosław Gorzko, responsible for Skanska Property Poland sales and marketing says: "On a par with many Warsaw citizens we admire the momentum of the Hochtief project, since their building is turning the Roundabout surroundings into a purely business district. But I am not afraid of losing potential customers to them since our type of office building appeals to another group of clients". Skanska Property Poland marketing manager thinks Rondo City buildings will be chosen by customers who "prefer looking at people rather than at a panorama of Warsaw". Rondo City is to comprise three buildings of around 120,000 sqm total space, situated along ul. Jana Pawła II. These will be sandstone elevation buildings of non-uniform shape the tallest elements of which will not exceed the top of Westin Hotel. Skanska wants to start work from building A which offers 22,000 sqm and will be situated in the direct vicinity of that hotel. Jarosław Gorzko states that work can commence when the company has tenants for around 50-60% of the office space, adding that talks are currently proceeding with two large tenants. Should these talks conclude successfully, construction could begin this Spring, with the first building to be completed in 2006. Jarosław Gorzko is also convinced that presently valid lease contracts held by many firms will terminate then. He also is sure that two years after Poland's entry to the European Union, the first positive outcomes to Poland's economy of that move will make themselves felt. The price of one square metre space in Rondo City will depend on the rent demanded by the proprietors of Złote Tarasy (Golden Terraces) and Rondo 1. Jarosław Gorzko refuses to give any kind of figure but does mention the sum of 24-25 EUR/sqm That is still a lot, taking the present market situation into account.

Modernisation - south west

A fine view is available from the upper floors of Ilmet office building of workers on Hochtief's site. But is Ilmet, the office building's owner, afraid of competition from his neighbour? When work on the construction of the Ilmet building commenced 8 years ago, its developer had tenants for 50 to 60% of its floor space. The period between February 1997, when the building opened, and 2001 could be justifiably termed Ilmet's golden age, the building being 100% occupied. But today, when several customers have vacated the building - e.g most Millenium Bank firms - and with a further number to leave it soon - e.g. Daimler Chrysler, around 20% of available space stands empty. In a building of almost 20,000 sqm floor space, that amounts to 4,000 vacant square metres. The building's owner is continually investing in internal systems, being aware that the absence of such investments could scare off tenants. The telephone exchange is being upgraded, the choice of Internet suppliers is being increased while the air conditioning system is being changed for one consuming less energy. Even so, though the rent in Ilmet is reasonable (20 EUR/sqm and 5.20 EUR/sqm running costs), no queues of potential tenants are lining up to get in. The concluded contracts concern rather small floor space: towards the end of the year three firms rented around 400 sqm.