Knight Frank’s Warsaw Office Market Report reveals that total investment last year was €3.2 billion, 16 per cent higher than in 2012 and the highest annual total since 2006.
International investors fuelled the rise in activity, as buyers look for opportunities away from the core Western European markets. Indeed, the range of nationalities looking at Polish commercial real estate become even more diverse in 2013, as French, Danish and Norwegian buyers all stepped up their investment.
Occupier activity also grew during the year, with take-up in Warsaw’s office market climbing 4 per cent year-on-year to reach 633,600 sq m.
“Three of the four largest deals of the year were pre-lets,” explains Knight Frank, including a pre-lease of office space in the Mokotow district by mobile phone network Polkomtel.
Nonetheless, vacancy rates are on the up thanks to rising levels of development, which is increasing supply. A total of 294,000 sq m of new office space was completed in Warsaw last year, with even more expected to be completed by the end of this year.
With vacancy rates forecast to rise in 2014 and reach 15 per cent by the end of 2015, the market is now in favour of tenants.