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Developers in retreat. Only two building permits for office buildings in 2020

21 of May '21

In 2020, only two building permits were issued for office buildings in Warsaw. This is a record low compared to recent years. Does this signal market saturation and stagnation, or was the situation influenced by the ongoing COVID-19 pandemic?

Raport

Photo: Deloitte

According to the Warsaw Crane Survey 2021 report prepared by Deloitte, the growth rate of the office market in Warsaw is declining. Since 1990, office space in the capital has grown to more than 5.6 million square meters. The report, which covers data from the last 11 years - including building permits, zoning applications and decisions already issued - shows that on the one hand, developers are building less, but on the other hand, they are investing in increasingly larger facilities.

pandemic has perpetuated the declines

The Bridge

photo: Ghelamco

It seems that it is the ongoing COVID-19 pandemic that has perpetuated the downward trends that have already been observed for several years. In 2019, 17 permits were issued, in 2020 only two. Both located in the rapidly expanding part of Wola. The first project is The Bridge, already under construction. Ghelamco's investment is located on European Square, and UNStudio from the Netherlands is responsible for the design of the office building. We wrote about the building in a dedicated article.

post-industrial decor

Inwestycja Skanski

Photo: Skanska

A second office building is set to spring up on Lucka Street - the skyscraper planned by Skanska The building is a project by Danish office Arrow and Warsaw-based Group 5 Architects. The building will open onto the Norblin Factory complex, which is just being completed. The two 100-meter-high towers connected by a five-story podium are to fit in with the post-industrial character of the area. The first three floors of the building are to be accented with a spatial structure of steel beams.

Raport

Photo: Deloitte

None of us had ever experienced a pandemic before. Overnight, we had to change our priorities. Health and epidemic safety became paramount. In times of pestilence, we had to reorganize our lives and the way we worked. It was a very difficult time for all of us. The local government, headed by Mayor Rafal Trzaskowski, had to organize the life of the city and offices while fighting the plague. Investors were learning how to carry on with their projects in a safe manner and what to do with those yet to be planned.

Marlena Happach, chief architect of the city of Warsaw

less, but more

Raport

Photo: Deloitte

Although the number of permits issued has dropped significantly, the total area of planned buildings is only 10% less than in 2019. Investors are increasingly building large complexes, incorporating service and retail functions into office projects as well. Another ratio cited by the report is that of vacancy. It oscillates at 10% in Warsaw, but if we take into account only completed or planned investments, vacancy is as high as 40%. Also noticeable is the tendency to change the function of projects already started. Most often, office buildings are turned into hotels or apartments, this applies mainly to buildings located in the so-called Mordor area.

Kacper Kępiński

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