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Offices on the increase

Office & mixed-use development
Across the globe, an unprecedented office building boom is underway with over 65 mln sqm of space under construction that will deliver between now and the end of 2019, Cushman & Wakefield’s Global Office Forecast reports. That’s the equivalent of recreating five cities worth of office inventory – Washington, DC, Dallas, London, Singapore and Shanghai – over the next three years.

The report details economic drivers, supply and demand forecasts and prospects for rent growth in more than 100 cities around the world.

Although demand, as well as job growth, will remain healthy through 2019, totaling app. 48 mln sqm, it will fall far short of supply, which will cause vacancy to rise in most cities around the world. From that perspective, the world is overbuilding.

Or, not. It also has been abundantly clear throughout this global expansion that most occupiers generally favor new, high-quality office space over older, Class B and C product. In the U.S., for example, newly built high-quality space has accounted for 65 pct of all office absorption since 2012. More often than not, developers have been rewarded throughout this cycle for delivering prime product, even in markets where vacancy is elevated. Additionally, the combination of an accelerating global economy with low interest rates is a recipe for healthy office-demand conditions.

“Developers are certainly placing some big bets on new product, but the bulk of it is concentrated in the major global cities, which is precisely where the greatest appetite is for these shiny new buildings,” said Kevin Thorpe, the global chief economist at Cushman & Wakefield. “I’m less concerned about the new space leasing up, because in a sense, that is supply rushing to meet demand. It’s giving tenants exactly what they are asking for. I’m more concerned about what this wave of supply means for lower-grade product, which I suspect will have a difficult time competing.”

The development boom will be led by Asia Pacific, particularly Greater China. In fact, nearly 60 pct of the world’s new construction will be concentrated in the Asia Pacific region. Within the region, new supply is concentrated in a handful of markets: Beijing, Shenzhen, Shanghai, Manila and Bangalore. Indeed, those five markets account for 55 pct of construction taking place in Asia Pacific and over one-third of construction worldwide. Much like the supply side, the demand side of the equation is strongest in Asia Pacific. Beijing will have the distinction of leading the world in both supply and demand growth.

The Americas region is also in the midst of a robust construction cycle, peaking in 2017 and tapering offer somewhat in 2018 and 2019. . Still, the U.S., Canada and Latin America will all build more space than they will absorb over the next few years. Again, it varies greatly from one city to the next, and the bulk of new space is concentrated in the largest cities, many of which arguably need it the most.

“In Europe the number of buildings underway is growing, although at a slower pace than in other regions. Over the next two years some key office markets such as Paris, London and Brussels will hit a cyclical high in terms of new construction, but the same cities report vacancy rates that are lower than the pre-recession level,” said Elisabeth Troni, the research and analysis director for the EMEA at Cushman & Wakefield.

Some completions are expected to be postponed due to Brexit-related uncertainty. Office rents will rise most rapidly in Madrid, Berlin and Stockholm, followed by Frankfurt, Milan and Budapest

“A lot of new office projects are underway or are planned in Warsaw to meet the high demand in the lease market. In the past 18 months over half a million sqm of office space has been handed over, which is a 10 pct rise in supply (from 4.66 mln sqm at the end of 2015 to 5.12 mln sqm in Q2 2017). At the moment app. 720,000 sqm is under construction, a number which is approximately equivalent to the five-year average. That proves that Warsaw’s office market is stable and will see healthy annual supply over the next three years,” says Kamila Wykrota, the consulting and market analysis director at Cushman & Wakefield Poland.

Europe Key Facts

Berlin and Munich will have the second- and third-lowest vacancy rates in the world by 2019, at 3.1 pct and 3.3 pct, respectively.

Over the next three years, the number of development completions is expected to increase significantly in Istanbul, London, Brussels, Vienna and Dublin. In fact, over 2017-18, Istanbul, Copenhagen and the City of London will see the highest level of completions so far this cycle.

On the other end of the spectrum, in Stockholm, Amsterdam and Helsinki, less than 2.5 pct of stock is expected to be completed in the near term, offering stronger potential rent growth and lower vacancy.

Budapest, Dublin, Copenhagen and Madrid expect to have the strongest growth rates in the office-reliant information and communications sectors.

Brexit-related uncertainty is expected to inhibit office-based job growth, but vacancy in London is still expected to remain tight, under 5 pct.

Latest news

Office & mixed-use development

Poland Polcast Media moves into Trinity One

schedule 18 March 2024
Opr./edited by ANZ

Polcast Media Group, the owner of Polonia 1 television, one of Poland's oldest commercial television stations, has recently secured a lease for circa 500 sqm in Trinity One office building located in Warsaw's Służewiec district.

Office & mixed-use development

Poland Loftmill makes its debut in Silesia

schedule 18 March 2024
Opr./edited by ANZ

The Loftmill label has joined the tenants of the .KTW I office building. Owned by Rise.pl, the company offers serviced offices and coworking space.

ESG

Poland BREEAM Outstanding for Panattoni

schedule 18 March 2024
Opr./edited by JC

Panattoni has been awarded another BREEAM certificate with a rating of Outstanding for Panattoni Park Poznań A2. The building B was constructed for H&M without the use of PCVs.

Office & mixed-use development

Poland Another tenant on board at Diuna

schedule 18 March 2024
Opr./edited by ANZ

Warsaw's Diuna office complex from the Syrena Real Estate portfolio has welcomed a new tenant, JDE Peet's. The company's new 900 sqm office was designed by BIT Creative.

Investment & finance

World Real estate at a pivot point

schedule 18 March 2024
Opr./edited by JC

Despite the monetary headwinds and continued economic uncertainty around the world, there is a strong belief that the global real estate industry is at a "pivot point", with improving prospects ahead for renewed investment activity, according to the latest Emerging Trends in Real Estate® Global Outlook 2024 from PwC and the Urban Land Institute. 

Warehouse & industrial

Poland AS-PL goes to Tricity

schedule 18 March 2024
Opr./edited by JC

Automotive company AS-PL has signed up to Panattoni Park Tricity East I by leasing nearly 2,900 sqm of warehouse and office space.

Eurobuild FM

Poland / Cannes Big business under the palm trees (ep. 1)

schedule 17 March 2024
Eurobuild CEE

MIPIM 2024 has officially closed, but we have our special podcast series from Cannes for you! Tune in to all the latest news, opinions and forecasts from the fair – this week exclusively at www.eurobuildcee.com and global streaming platforms!

Warehouse & industrial

Poland Plant ready for operation

schedule 15 March 2024
Opr./edited by ANZ

Panattoni has completed and handed over the main European production facility for Maxcess. Built on a BTS basis, the new hall in Łubowo will facilitate the relocation of the existing factory, enhance the capacity for new product and service development, and is expected to double employment, bolstering the local labor market's growth.

Warehouse & industrial

Germany Early full occupancy in Hamburg

schedule 15 March 2024
Opr./edited by ANZ

The technology company Freudenberg Sealing Technologies will move into the multi-user campus Victoria Park Hamburg, currently being developed by Garbe in a joint venture with the Jebens Group. The property, which has a total area of around 12,000 sqm, is scheduled for completion in February next year.

Retail & leisure

Poland Redkom develops Przystanek Karkonosze

schedule 15 March 2024
Opr./edited by ANZ

Office & mixed-use development

Hungary Green light for Millennium Gardens

schedule 14 March 2024
Opr./edited by JC

Revetas Capital and TriGranit have officially secured the occupancy permit for the second phase of Millennium Gardens in Budapest.

Office & mixed-use development

Romania Timpuri Noi Square twice as big

schedule 14 March 2024
Opr./edited by ANZ

Vastint Romania is starting phase II of the Timpuri Noi Square project in Bucharest. After obtaining the necessary permits, the developer will construct two new office buildings, which will increase the area of the entire complex to more than 100,000 sqm.

Warehouse & industrial

Poland Electronics at Segro Logistics Park Gliwice

schedule 13 March 2024
Opr./edited by JC

Segro has signed an agreement with Centrumelektroniki.eu for the rental of warehouse and office space in Silesia. In the new location, the company will strengthen its existing logistics services, offering more efficient completion and shipment of products to the target customer.

Warehouse & industrial

Poland Construction starts on CTPark Rzeszów

schedule 13 March 2024
Opr./edited by JC

CTP is starting construction of its first manufacturing and logistics complex in the Podkarpackie region. In Rzeszów, the developer will build a complex of two facilities with a total leasable area of nearly 50,000 sqm.

Office & mixed-use development

Poland Konika Minolta stays at The Park Warsaw

schedule 13 March 2024
Opr./edited by ANZ

Konica Minolta Business Solutions has extended its 3,000 sqm office lease at The Park Warsaw complex in the capital's Włochy district. The company will remain in the location for another five years.

Warehouse & industrial

Poland Better second half

schedule 13 March 2024
Opr./edited by JC

After the very successful years of 2021 and 2022, known as the golden period of development of the industrial market in Poland, 2023 was a period of greater challenges due to a change in the macroeconomic situation. Axi Immo presents the "Polish Industrial Market 2023" report.

ESG

Europe We know the winners of Global ESG Awards

schedule 13 March 2024
Opr./edited by JC

The trophy ceremony for the Global ESG Awards took place during MIPIM in Cannes. Following 180 nominations across six categories, 6,801 public votes and 2,177 evaluations done by a global official jury committee, a ranking revealed six  winners.

Investment & finance

CEE NEPI Rockcastle boosts the pipeline

schedule 12 March 2024
Opr./edited by ANZ

NEPI Rockcastle has expanded its development and refurbishment pipeline in 2024 to just over EUR 650 mln across its Central and Eastern European markets, the biggest retail investment programme in the region.

Retail & leisure

Romania Leroy Merlin to expand in Bucharest

schedule 12 March 2024
Opr./edited by JC

Leroy Merlin leased two retail spaces in Bucharest with a combined area of 21,000 sqm from the Supernova Group.

Investment & finance

Poland Rock Park Przeworsk changes owner

schedule 11 March 2024
Opr./edited by ANZ

The Rock Park Przeworsk retail park, opened at the beginning of February, gained a new owner after a month of operation. The transaction took place between RockCapital. and ME Invest, a company owned by TERG S.A., owner of the Media Expert chain. 

Latest in Office & mixed-use development

schedule 18 March 2024

Polcast Media moves into Trinity One

Polcast Media Group, the owner of Polonia 1 television, one of Poland's oldest commercial television stations, has recently secured a lease for circa 500 sqm in Trinity One office building located in Warsaw's Służewiec district.

schedule 18 March 2024

Loftmill makes its debut in Silesia

The Loftmill label has joined the tenants of the .KTW I office building. Owned by Rise.pl, the company offers serviced offices and coworking space.

schedule 18 March 2024

Another tenant on board at Diuna

Warsaw's Diuna office complex from the Syrena Real Estate portfolio has welcomed a new tenant, JDE Peet's. The company's new 900 sqm office was designed by BIT Creative.

schedule 14 March 2024

Green light for Millennium Gardens

Revetas Capital and TriGranit have officially secured the occupancy permit for the second phase of Millennium Gardens in Budapest.

schedule 14 March 2024

Timpuri Noi Square twice as big

Vastint Romania is starting phase II of the Timpuri Noi Square project in Bucharest. After obtaining the necessary permits, the developer will construct two new office buildings, which will increase the area of the entire complex to more than 100,000 sqm.

schedule 13 March 2024

Konika Minolta stays at The Park Warsaw

Konica Minolta Business Solutions has extended its 3,000 sqm office lease at The Park Warsaw complex in the capital's Włochy district. The company will remain in the location for another five years.

schedule 11 March 2024

Historical building with a current shine

Zeitgeist Asset Management obtained new prestigious tenants. The international law firm CMS and the European Investment Bank have rented office space in the newly renovated Palác Dunaj building in the historical centre of Prague.

schedule 11 March 2024

Doctors stay in West Gate

Enel-med, a network from the medical services industry, has extended its lease at Wrocław's West Gate building, owned by Globalworth, for another ten years. The tenant will expand dental and rehabilitation services for its patients.

schedule 08 March 2024

Emonika takes off in Ljubljana

Mendota Invest has received the final building permit for the construction of Emonika, an urban complex that will include a shopping centre, business premises, hotels, and apartments. The estimated value of the entire investment is more than EUR 350 mln.

schedule 06 March 2024

A breath of fresh air for Tryton

Muehlhan Wind Service has opened its new office on the fourth floor of the Tryton Business House building in Gdańsk.

schedule 04 March 2024

The Warsaw Park is almost full

The Park Warsaw gained new tenants during Q3 and Q4 2023 and renewed contracts with existing partners. The office campus, which is managed by White Star Real Estate, is currently 90 pct leased.

schedule 04 March 2024

MSC has chosen Waterfront

MSC Poland, which represents MSC Mediterranean Shipping Company, has leased 1,545 sqm of office space in Gdynia Waterfront. The tenant will move into its new office in Q4 2024.

schedule 04 March 2024

Educational projects in Silver Forum

Three new tenants from the science and education sectors have chosen Wrocław's Silver Forum office building for their premises. The largest space, almost 2,000 sqm, will be occupied by the private high school Liceum Navigo Wrocław.

schedule 29 February 2024

New city within a city

Echo Investment and Archicom will develop a multifunctional project on ul. Wita Stwosza in Kraków. Five four-storey buildings will be constructed on the site of the former supply warehouses of the Kraków Fortress. The project will be built in stages and is expected to be completed in 2026.

schedule 29 February 2024

Develia changes its office in Wrocław

Develia is moving its office from Arkady Wrocławskie to the City Forum complex on ul. Traugutta. In the City 1 building, the developer has leased around 1,400 sqm.

schedule 29 February 2024

Lixa D has new tenant

A fintech company has leased almost 2,600 sqm of office space in the Lixa D building, which is under construction near Rondo Daszyńskiego in Warsaw. The new tenant will occupy more than 25 pct of the commercial space available in the building.

schedule 28 February 2024

Studio B fully leased

Societe Generale Branch in Poland and SG Equipment Leasing Poland, companies belonging to the French financial group Societe Generale, are moving into the Studio complex in Warsaw, which is being developed by Skanska.

schedule 28 February 2024

Heimstaden moves to IQ Ostrava

CTP has signed a lease agreement with Heimstaden, the provider of rental housing in the Czech Republic, for almost 3,500 sqm of office space at IQ Ostrava. IQ Ostrava was the first office building in Ostrava to be BREEAM Excellent certified ten years ago.

schedule 28 February 2024

Saski Crescent Half leased

The IT company will occupy more than 6,000 sqm, comprising three floors, in the Saski Crescent office building located in the centre of Warsaw. The building is nearing the end of a major modernisation process.

schedule 27 February 2024

Two new leases signed at Bonarka for Business

Two new contracts for the lease of office space in the Bonarka for Business complex in Kraków have been signed. A total of 825 sqm of space has been leased.

Edition 3 (286) March 2024

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