From offices in tenements to luxurious towers

From offices in tenements to luxurious towers

Over 20 years ago, commercial real estate market in our country practically did not exist. Today Warsaw offers 5 million square meters of modern office space

When in 1989 the doors of the socialist reality were opened to let in the free market principles to business operations, the office market as we know it today was yet to be developed. The commercial property segment in our country has only began to form. A quarter of a century ago, modern office buildings that existed in Warsaw could have been counted on the fingers of one hand. Western companies usually located their offices in large apartments in tenements situated in the city center.

Warsaw skyline was marked by several buildings. Among them were the Palace of Culture and Science, Oxford Tower, Intraco, Novotel and Universal. LIM Centre and Marriott by Aleje Jerozolimskie Street enjoyed the status of the most prestigious business address in the city for many years. Błękitny Wieżowiec by Plac Bankowy Square was commissioned two years later.

The largest office area in Poland

Mokotów office zone was only in plans. Its development was to be initiated it the second half of the 90s by GTC company with the construction of Mokotów Business Park, today's Empark Business Park, on the plot by Domaniewska Street, where among the tall grass were buildings of the bankrupt Unitra Cemi factory. At the beginning of the transformation, Warsaw Służewiec was the area of warehouses, railway sidings and gloomy industrial buildings. It was not until many years later, when the extensive network of office complexes that today form the largest business area in Poland began its development.

The process of privatization and economic restructuring, including the development of the services sector, which now accounts for a significant part of the demand for commercial space, was not easy with the raging inflation. It was the result of printing money without coverage by the desperate political system trying to save itself. Back then,  rental fees were given only in dollars or the German marks, and the price for the best office space, for example in Intraco exceed $50 per sq m monthly.

Record supply of new offices in 2000

Warsaw soon began to change and became a huge construction site. The scale of expansion was indicated by a record amount of 400 thousand sq m of office space commissioned in 2000, which has not yet been beaten. In 10 years between 1991 and 2001 the supply of modern office space in Warsaw rose from 250 thousand sq m to 3.5 million sq m. Walter Herz experts mention that Austrian, Scandinavian, Belgian and later American companies invested  in post-communist Poland. Today it's mostly international capital.

In the first decade of market transformation in Warsaw, such well-known facilities as Kolmex (1992), Warsaw Corporate Center (1993), IPC Business Center / Koszykowa 54 (1993), Aktyn Business Center by Chmielna Street (1995), the first buildings of Atrium Business Center complex on Al. Jana Pawła II Street (1995) were built. Puławska Financial Center, Orco Tower (Fim Tower then) and the first buildings of the abovementioned Empark - Galaxy and Jupiter were commissioned in 1996.

Warsaw office buildings we've known for years

Prima Court office building by Nowogrodzka Street and Ilmet by ONZ roundabout were built in 1997. A year later, Holland Park / Ethos by Plac Trzech Krzyży Square, which for 15 years was the headquarters of ING, Kaskada, Nautilus, Norway House, Sienna Center, located at the intersection of Emilii Plater and Świętokrzyska Street - Warsaw Financial Center, Alma office building at Marynarska Street as well as BTA Office Center at Rzymowskiego Street. In 1999, Millennium Plaza, Saski Point at Marszałkowska Street and Warsaw Towers at Sienna Street appeared by Al. Jerozolimskie Street.

First-class facilities that offer cutting-edge technology appeared later. In 1999, Warsaw Trade Tower measuring 208 meters was built. It's only this year that the facility gave the title of the tallest office building in Warsaw to the recently commissioned Warsaw Spire (220 m). In 2003, Metropolitan appeared on the Warsaw map of office buildings. And three years later, in 2006, one of the tallest towers in Warsaw - Rondo 1 was commissioned by ONZ roundabout. This year, the 192 meter facility was the first in Poland to get LEED Platinum certificate in the O + M category, the highest rating in the world's most popular system of ecological certification of buildings. In 2014, the building was sold for 297 million Euros.

The first business parks such as Jerozolimskie Business Park (1996), Ochota Office Park (1999), University Business Center (2000) appeared alongside the office buildings. In 2007, Wiśniowy Business Park was completed after 10 years of  construction.

Tenants were looking forward to offices under construction

In the early 90s,  office  space in the emerging Warsaw buildings were getting leased on the spot,  and the vacancy rate was 2-3 percent. It is only from 1998, that the rapid grow of the supply of modern office space resulted in an increase in the vacancy rate. Walter Herz specialists note that in 1999, the first serious crisis that lasted for over two years occurred and repeated in 2009. Nowadays, over 760 thousand sq m of modern office space, that is over 15 per cent of Warsaw's resources is waiting for tenants - calculate Walter Herz experts.

Warsaw is now perceived as one of the most attractive European locations for future expansion of the companies. The most rapidly expanding area is currently the region around Daszyńskiego roundabout. According to Walter Herz, in the completed office buildings in that region there is over 400 sq m of modern office space. Company's specialists estimate that a similar number of offices will be offered in the facilities that are emerging in this area, as well as the ones that are currently being built in the district of Wola, which he has become an extension of the downtown. Walter Herz experts emphasize that in a few years the supply of office space in this area of the city will match the famous Służewiec business zone.

The new office zone

Impressive facilities, both in terms of architectural solutions, as well as the size are to be built in close proximity to Daszyńskiego roundabout. In 2019, a soaring 195-meter Skyline building is to be completed . The tower is situated at the corner of Towarowa and Prosta  Streets and will offer over 38 thousand sq m of office space and more than 3 thousand sq m of retail space. Sienna Towers complex is already being built right next to it. The complex will include  two towers measuring 130 meters and one measuring 86 meters, connected by a shared several-storey podium. The facility will offer 75 thousand sq m of office space and 25 thousand sq m of retail and conference space.

On the corner of Okopowa and Towarowa Streets, also the construction of Spark complex has begun. Total leasable area in the facility will amount to over 70 thousand sq m. Generation Park, which is to be completed at the end of 2017 and provide 84 thousand sq m offices is also emerging at the junction of Towarowa and Prosta Streets. In the vicinity of Daszyńskiego roundabout a 39-storey Spinnaker with an area of 55 thousand sq m is also in plans. Moreover, a 130-meter Mint Legacy Tower will stand at the corner of Prosta and Żelazna Streets.

Currently in Warsaw there are nearly 550 thousand sq m of new offices under construction. This year, the metropolitan office market has a chance to break the record of sixteen years, in terms of annual increase of office space. Only in the first half of the year, about one-fourth more offices were commissioned than in the entire last year.  According to Walter Herz experts, this year, the new supply is likely to exceed the level of 450 sq m and will be the largest in the history of the market.