Poland’s office market saw a massive decrease in leasing activity in the first three months of this year as the global economic climate continued to decline, according to research of real estate consultancies.
According to Warsaw Business Journal, many potential tenants are now adopting a wait-and-see approach, putting further pressure on rental rates.
– There are many tenants looking for space but only a few of them end up signing lease contracts. They are waiting for further developments on the office property market, and this situation is heading towards a further decrease in rents – said WBJ’s Mateusz Polkowski, a senior research analyst at Jones Lang LaSalle Poland. The vacancy rate is also being fueled by existing tenants looking to recoup costs by offering to sub-lease some of their rented office space. Sub-leasing is now becoming an increasingly popular trend.
Comparing to situation in Poland, Katowice’s office rents still remain stable. The situation hasn’t changed in the Q1 2009 due to the same period in 2008. It is connected with low supply and low vacancy rate. It might be changed in 2010 when developments which already entered the pipeline will be finished. Some of the projects constrution finish is going to be delayed, as the investors wants to provide theirs office buildings in a stabilization market phase. If the analysts forecast is correct and an improvement in the economy predicted for the end of 2009 comes true, the new developing office spaces will not need to wait for tenants for a long time. Otherwise, we can expect a high vacancy rate and a decline in rents in Katowice. Additionally, projects which are already postponed to start in 2010, may be delayed over again.