Savills report reveals creation of new tenants in Warsaw
According to the real estate advisor Savills, the new trend in the office market in Warsaw is the creation of a new group of tenants – co-working space operators, which generate an increasing share of demand.
In addition, as a result of Brexit, up to 4,000 new jobs can be created in Warsaw and the falling unemployment rate will increase the importance of office space in attracting best talents.
A new era of co-working
Warsaw is becoming the center of the startup community. No clear definition makes it difficult to estimate the scale of this phenomenon. However, it is assumed that there are currently about 2,700 startups in Poland. Ca. 6 percent of them are located in Warsaw and accounts for 11 percent of the city’s total GDP. It is forecasted that in the coming years this sector will grow at an average annual rate of 4.1 percent.
Co-working space operators present in Warsaw include: Business Link, the Brain Embassy, The Heart, Mindspace and TechHub. The largest developers such as Ghelamco Poland and Skanska Property Poland team up with co-working space providers to support innovation and entrepreneurship as part of their development strategies.
Warsaw has a record low unemployment rate, which additionally is set to fall next year from 2 percent to 1.5 percent. The cost of leasing office space is becoming only one of many key decision drivers next to fantastic location, superb amenities and good transport links, i.e. The competition for best talents is the strongest among IT and FinTech companies and tenants from these sectors will put office location on the top of corporate agendas.
Dominance of the financial sector
The financial services industry was the most active group of tenants in the office real estate market in Warsaw. In 2016 the sector generated 40 percent of demand, taking into account the largest transactions of at least 2,000 sq m. The banking and insurance sector activity will remain high with forecasted employment growth of 3.1 percent in 2017 and 2.1 percent in 2018. There may be a demand for additional space from banks, which have their administrative and IT back-offices in Poland.
Warsaw to capture a share of post-Brexit business
Warsaw is one of the contenders to capture a share of post-Brexit business. Potentially 4,000 new jobs might be created in the capital. Large availability of modern office space, highly educated employees and favourable tax regulations, among others position Poland as an attractive location for foreign investors. The biggest advantages of Warsaw include comparably low rents, 64 percent lower than in Paris and 44 percent lower than in Frankfurt.
Warsaw office market in brief
“Co-working is starting to take Warsaw by storm,” said Jarosław Pilch, Director, Head of Tenant Representation at Savills. “Promoting innovation and entrepreneurship, as well as adapting offices to the requirements of the new generation of employees, are the strongest trends in the office real estate market in the capital. The high supply of modern office space combined with the competitive rents comparing to other Western European capitals, is an opportunity for Warsaw to capture a share of business after Brexit.”
Press release by Savills.