Demand remains unsated

These were the main conclusions of the office market panel at the Investment Market Conference held by Eurobuild in the Intercontinental Hotel in Warsaw on February 27th. The panel moderated by Tomasz Puch from JLL al agreed that Poland will soon see a gap between the supply and demand for office space. “The shortfall that awaits us in 2021-22 means that the largest companies – provided they are still growing and considering moving to larger offices – are looking for space in developments that are planned to be delivered in 2023 or later. Currently we are signing leases for 7-10 years and meanwhile we are only just putting up the diaphragm walls for our buildings and future tenants are competing fiercely for the best offices – this bodes well for the sector and for the entire economy,” claimed Rafał Mazurczak from Echo Investment.

However, he also stated that investors in regional cities should be more cautious in their optimism – Because these markets are so small even a single miscalculated office project could change the balance between supply and demand. The recipe for success is timing – those who plan properly will have no problems with their leasing. “I am also somewhat pleased that the demand for medium standard office buildings has also increased. Until recently, the big investors were only interested in ‘prime’ properties and opportunistic deals for lower standard real estate. Everything in between was hardly noticed and somewhat neglected. Now investors have dramatically changed their approach,” stated Jarosław Prawicki from Karimpol. But what about the massive square meterage to be delivered to the Warsaw market between 2020 and 2021, is this not going to flood the market?”

Magdalena Kowalewska from Immofinanz doesn’t believe so. “Companies are still growing rapidly – both through acquisitions and organically while the market has a regular supply of tenants entering the market. The lack of supply will probably change some aspects of the market but will not last forever,” argued Magdalena Kowalewska. “high demand, low supply and rising construction costs means just one thing: rising rents,” Jarosław Prawicki from Karimpol announced at the end of the panel.