Take-up in the Warsaw office market rose by 24% year-on-year to about 260,000 m[sup]2[/sup] in the first half of 2007, according to the latest Polish office report issued by real estate advisor Colliers International. The first quarter of 2007 registered a record with deals signed in the city for 144,000 m2, while the second quarter saw activity levels of about 116,000 m[sup]2[/sup]. High demand and insufficient quantities of new supply in the city brought about a decrease in vacancy rates and increases in rents.

Take-up in the Warsaw office market rose by 24% year-on-year to about 260,000 m2 in the first half of 2007, according to the latest Polish office report issued by real estate advisor Colliers International. The first quarter of 2007 registered a record with deals signed in the city for 144,000 m2, while the second quarter saw activity levels of about 116,000 m2. High demand and insufficient quantities of new supply in the city brought about a decrease in vacancy rates and increases in rents.

The Central Business District outperformed the rest of the Warsaw market accounting for 48% of transactions in the first quarter. However, the second quarter was dominated by the suburbs and the Upper South Zone, which accounted for 45% of leasing activity. This was largely the result of pre-lease transactions between tenants and developers for the numerous new projects under development in this area.

In the first half of 2007 some 139,931 m2 of office space was delivered to the market, mainly located in the suburbs. As a result the total stock of office space in Warsaw now stands at over 2.6 million m2. The city's West Zone, particularly the Wola district, is attracting increasing interest, and has the potential to become an attractive business area in the future, particularly with a new east-west metro line planned for the city.

Warsaw's vacancy rates fell from 7.9% in the first half of 2006 to 4% in the same period this year. Rents increased significantly in the last six months, especially in the central business district, which registered a rise from EUR 17 per m2 to EUR 22 per m2, or up to EUR 28 per m2 in some buildings. In the suburbs rents are more stable at EUR 14-16 per m2.