News Article coronavirus office report Walter Herz Warsaw
by Property Forum | Office

In the current time of intense market changes, space in centrally located boutique office buildings might become a good option for companies migrating from large Warsaw facilities, according to consultancy firm Walter Herz.

Last year was one of the record-breaking periods in terms of the amount of space leased on the Warsaw office market, which for several years has been growing at a pace that had not been previously recorded in history. March 2020 has brought radical changes. COVID-19 has completely changed the market reality. It is still difficult to determine how much it will affect trends in the long run, but it is already known today that many companies are looking for ways to reduce expenses related to leasing space. In the post-COVID-19 reality, intimate office buildings that offer smaller spaces in unrivalled business locations may gain popularity.

Boutique office properties, providing high-class space and great service, are responsible only for a small part of the capital's offer. According to Walter Herz calculations, there is only over 270 thousand sqm of space in modernized tenements and exclusive, modern office buildings located in the downtown area of Warsaw.

“The offer in this type of facilities is not large. And due to the low vacancy rates seen on the Warsaw market before the epidemic, which in the city centre did not exceed 5 per cent, there are very few vacant offices in them. Nevertheless, many entities are interested in relocation to small office buildings. It is an optimal solution for companies, both due to the change in the nature of teamwork and optimization of rental costs in the event of an economic slowdown, which we all have to face today,” says Bartłomiej Zagrodnik, Managing Partner/CEO at Walter Herz. “Savings in this case, however, should be calculated, not so much according to the rates per meter, because these are among the highest on the market, but according to the total prices for leasing compact space.”

Small office buildings and restored office tenements located in the central office zone are usually chosen by entities aware of the impact that the prestigious address of the headquarters has on the company's image. These are most often workplaces of business services units, financial and consulting companies, law firms, architectural offices, marketing agencies, as well as international associations and organizations and diplomatic offices.