Office surplus causing a headache for developers?

Over 70 percent of a total of 733,000 sqm. of office space which is to be delivered in 2015 is still vacant, with 240,000 sqm. of office space still available in Warsaw, according to figures from JLL real estate services.

Last year, the amount of new office space increased by 640,000 sqm., although not all developers should be worried, says JLL director Mateusz Polkowski.

“Owners of modern and well-located office buildings, who have a flexible approach to tenants, should not be worried,” he said, adding that “with falling rent rates they have a greater ease in bringing in tenants from older and more expensive buildings”.

Regional office markets are driven by shared services, with BPO centres leasing some 200,000 sqm. of office space in regional Polish cities in the first three quarters of 2014.

By comparison, BPO centres leased the same amount of space in 2013 as a whole.

“Developers have answered strong demand in regional cities with high supply, more than the market could absorb” Polkowski said, concluding “that is why the amount of vacant offices is on the up and there is possible greater pressure on rents”. (jb)

Source: Puls Biznesu