M A R K E T B E AT

MARKETBEAT CENTRAL Office Q2 2020 M A R K E T B E AT CONTENTS

Bratislava (SK)

Bucharest (RO)

Budapest (HU)

Prague (CZ)

Warsaw (PL) M A R K E T B E AT Office Q2 2020

YoY 12-Mo. ECONOMY: Among the First Countries to Reopen, Economy in Recovery Phase Chg. Forecast Slovakia’s economy has been hit by the domestic, as well as international restrictive measures which have been implemented to minimize the impact of the coronavirus pandemic on public health. According to Oxford Economics data, Slovakia’s real GDP 9.8% should see a year-over-year drop in all four quarters of 2020. Prices should continue to rise, although by a smaller rate. The Vacancy Rate trough of the economic activity was reached in Q2 and most of the economy should now be in a recovery phase, including domestic demand, private sector revenues, industrial production, exports and retail sales. Due to a relatively mild course of the pandemic, Slovakia enjoyed one of the fastest reopenings of the economy in the world. The sentiment in private sector has €17.00 grown less tense as evidenced by the month-over-month increase in industrial turnovers, construction output and real estate Prime Rent, Sq m/month activities (based on the Statistical Office of the Slovak Republic data). 5.75% SUPPLY & DEMAND: Expected Drop in Leasing Confirmed, Developers React by Postponing Supply Prime Yield The office property stock saw the first completions since Q4 2019, delivering around 48,000 sq m of class A offices. This includes the competitive projects of Nivy Tower by HB Reavis and Einpark Offices by Corwin. As part of the new supply is (Figures based on class A+B only.) speculative, we see an increase in overall vacancy rate in the Bratislava office market, reaching 9.82%. On the other hand, the Source: Bratislava Research Forum Bratislava IV district has seen a decrease in vacancy rate as a new tenant from public sector moves into Westend Plazza by JTRE. There are currently 11 buildings under construction, totaling 174,000 sq m. Most of this stock (126,000 sq m) is in central ECONOMIC business district (CBD). Additional 63,400 sq m of office stock should be added in 2020 and only 26,400 sq m should be INDICATORS Q2 2020 delivered in 2021 as developers respond to coronavirus crisis by postponing planned supply. Total occupied office stock YoY 12-Mo. increased by 21,000 sq m quarter-over-quarter. This represents a third consecutive quarterly increase in net absorption. Gross Chg. Forecast take-up decreased annually, totaling 31,000 sq m. However, the net take-up share continued to rise and exceeded 64% in Q2. 242K Bratislava PRICING: Prime Rent Holds Steady while Prime Yield Sees a Small Uptick Employment Prime rent remained at 17.00 EUR/sq m/month and is achievable in city centre and CBD. Prime yield saw a minor increase of 0.15% to 5.75%. Competitive leasing market translated to an increase in standard rent free period from 5-6 months to now 6-7 months on a 5 year lease contract or even longer based on the level of competitiveness of a project. Tenants are increasingly 2.7% considering the level of their operating expenses and some show interest in reducing the leased area, although most Bratislava companies in Slovakia don’t intend to move to a home-based model of working. Stronger negotiating power on the side of Unemployment Rate tenants contributes to higher incentives and contributions. 7.4% SPACE DEMAND / DELIVERIES OVERALL VACANCY & ASKING RENT Slovakia Unemployment Rate 150 17 € 10% 9% Source: ÚPSVaR 100 16 € 8% 50 15 € 7% 6% 0 14 € Thousands 5% 13 € 4% -50 2016 2017 2018 2019 2020 2016 2017 2018 2019 YTD 2020

Net Absorption, SM Construction Completions, SM Prime Rent, € PSM Vacancy Rate M A R K E T B E AT BRATISLAVA Office Q2 2020

MARKET STATISTICS

INVENTORY AVAILABILITY OVERALL VACANCY CURRENT QTR YTD OVERALL UNDER CNSTR PRIME RENT SUBMARKET (SQ M) (SQM) RATE TAKE-UP (SQ M) TAKE-UP(SQ M) (SQ M) (€/SQ M/MTH)

CC 485,700 36,000 7.4% 500 2,300 3,600 17.00

IC 259,100 12,800 4.9% 2,800 6,800 28,800 14.00

OC 414,900 56,500 13.6% 13,700 15,900 15,900 11.50

CBD 564,800 61,200 10.8% 12,700 29,700 125,800 17.00

SB 162,400 18,800 11.6% 1,300 2,100 0 15.00

BRATISLAVA TOTALS 1,886,900 185,300 9.8% 31,000 56,800 174,000 17.00

KEY LEASE TRANSACTIONS Q2 2020

PROPERTY SUBMARKET TENANT SECTOR RSM TYPE Public/Embassy/Trade Westend Plazza OC 9,300 new lease Council/Diplomatic City Business Center II CBD Prof. services 1,971 renegotiation

Apollo Business Center II CBD Prof. services 1,717 new lease JURAJ BRONČEK Research Analyst Trade Center II IC IT 1,500 renegotiation +421 (0) 910 162 011 /[email protected] Tower 115 CBD Prof. services 1,396 renegotiation cushmanwakefield.com

KEY CONSTRUCTION COMPLETIONS YTD 2020 A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global real QUARTER OF estate services firm that delivers exceptional value for real PROPERTY SUBMARKET SM COMPLETION estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 Nivy Tower CBD 31,000 2 employees in 400 offices and 60 countries. In 2019, the firm had revenue of $8.8 billion across core services of property, Proxenta Tower CC 1,000 2 facilities and project management, leasing, capital markets, valuation and other services. Einpark Offices SB 16,000 2 ©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may Source: Bratislava Research Forum contain errors or omissions and is presented without any warranty or representations as to its accuracy. M A R K E T B E AT BUCHAREST Office Q2 2020

YoY 12-Mo. SUPPLY: Developers continue to provide new supply Chg. Forecast In Q2 2020, new deliveries totaling more than 27,000 sq. m have been completed, consisting of the third and last phase of The Bridge project from the Central – West area and Zone 313 in the Floreasca – Barbu Vacarescu hub. The total new supply for the 10.1% first semester reached 108,000 sq. m, reflecting a 16% y-o-y decline. The modern office stock of Bucharest reached 3.2 million Vacancy Rate sq. m, while the vacancy rate increased to the 10.1% level. There is a significant difference between the vacancy rates for A and B class office buildings, with A class properties recording a level of 7.2%, compared to 17% in B-class buildings. €19.00 New projects totaling more than 430,000 sq. m GLA are currently under construction, the remaining pipeline for 2020 being Prime Rent, Sq m/month estimated at app 100,000 sq. m. The most active sub-markets in terms of deliveries during the following period will be West and Central – North, with more than 160,000 sq. m under construction in each of these submarkets and a cumulated market share of 75%. The most important developments currently under construction are One Cotroceni Park, Campus 6.2 and 6.3, J8 Office 7.00% Park, Globalworth Square, U Center and One Tower. Prime Yield

(Overall, All Property Classes) DEMAND: Covid-19 pandemic impacts the leasing activity In Q2 2020, the total leasing activity in Bucharest was of 44,500 sq. m, with net take-up having a share of only 42%, since most transactions were renewals. The Central-North submarket attracted almost 50% of the total volume and also the largest ECONOMIC transaction, the contract renewal agreed between UniCredit Bank and Globalworth for the 15,500 sq. m UniCredit HQ building. INDICATORS Q2 2020 During H1 2020, the total leasing activity reached 97,000 sq. m, reflecting a 50% y-o-y decline and a record-low volume for the first semester during the last decade. Since restrictions were gradually lifted after two months of lockdown, activity started to YoY 12-Mo. Chg. Forecast pick-up, but most occupiers are still reluctant to commit for long-term contracts. 1.0M PRICING: The market is still confident, as rents remain stable Bucharest Prime headline rents in Bucharest remained stable in Q2 2020, as asking rents in the CBD area generally fall in the €18.50- Employment 19.00/ sq m/month range, with values of €16.00-17.50/ sq. m/month being recorded in the most representative buildings from the Central-North submarket. 1.3% Bucharest Unemployment Rate 3.4% SPACE DEMAND / DELIVERIES OVERALL VACANCY & ASKING RENT Romania Unemployment Rate (F) €20 16% 350 €19 14% 300 Source: Oxford Economics, National Institute 12% 250 €19 of Statistics 10% 200 €18 8% €18 150 6% €17 Thousands 100 4% 50 €17 2% 0 €16 0% 2015 2016 2017 2018 2019 H1 2020 2015 2016 2017 2018 2019 2020

Net Absorption, Sq m Construction Completions, Sq m Prime rent, €/sq m/month Vacancy Rate M A R K E T B E AT BUCHAREST Office Q2 2020

MARKET STATISTICS

STOCK AVAILABILITY CURRENT QTR YTD TAKE-UP YTD COMPLETIONS UNDER CNSTR PRIME RENT SUBMARKET VACANCY RATE (SQ M) (SQ M) TAKE-UP (SQ M) (SQ M) (SQ M) (SQ M) (€/SQ M/MTH)

CBD 357,400 22,800 6.4% 3,300 5,143 - 38,900 19.00 Central-North 758,100 54,000 7.1% 21,890 23,661 41,700 163,800 17.50 North 234,700 20,900 8.9% 492 3,242 - - 15.00 Pipera 724,100 110,200 15.2% 6,639 14,651 34,800 - 13.00 West 608,900 57,100 9.4% 6,549 31,645 21,200 166,500 15.00 Central 365,900 40,100 11% 5,043 8,893 10,500 62,100 15.00 South 42,000 1,000 2.4% - 8,991 - - 12.00 East 122,300 19,000 15.6% 600 600 - - 12.00

Bucharest (overall) 3,213,400 325,100 10.1% 44,513 96,826 108,200 431,300 19.00

KEY LEASE TRANSACTIONS Q2 2020

PROPERTY SUBMARKET TENANT RSQM TYPE CRISTI MOGA Head of Research UniCredit HQ Central-North UniCredit 15,500 Renewal +40 21 310 3100 / [email protected] Hermes Business Campus Pipera Luxoft 5,600 Renewal

The Light I West ON Semiconductor 3,200 New lease VLAD SAFTOIU Research Analyst U Center Central UP Romania 2,400 Pre-lease +40 21 310 3100 / [email protected] KEY SALES TRANSACTIONS Q2 2020 cwechinox.com

PROPERTY SUBMARKET SELLER / BUYER SQM PRICE cushmanwakefield.com Global City Pipera Global Finance / Arion Green 51,000 €55M

The Bridge III West Forte Partners / Dedeman 21,200 €53M

KEY CONSTRUCTION COMPLETIONS YTD 2020

PROPERTY SUBMARKET MAJOR TENANT PROJECT SIZE (SQM) OWNER / DEVELOPER ECHINOX RESEARCH PUBLICATION ANA Tower Central-North PwC 35,500 ANA Holding Independently Owned and Operated / A Member of the Cushman & Wakefield Alliance Globalworth Campus - III Pipera UniCredit, Allianz 34,800 Globalworth ©2020 All rights reserved. The information contained within this The Bridge III West IBM 21,200 Dedeman / Forte Partners report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without Source: Cushman & Wakefield any warranty or representations as to its accuracy. M A R K E T B E AT BUDAPEST Office Q2 2020

YoY 12-Mo. ECONOMY: Coronavirus now expected to lead to 9.6% drop in GDP in Q2 and 5.0% in 2020 overall Chg. Forecast Hungary has come out of the COVID crisis comparatively well and the economy is ranked one of the most resilient to the impacts of Coronavirus epidemic, with a contraction of 5.0% expected for 2020, according to Oxford Economics. The GKI business 7.3% sentiment index has strongly improved over the last couple of months, but remained pessimistic as at the end of Q2. Hungary Vacancy Rate entered the current crisis from a position of relatively solid macro fundamentals. Growth started from a high base, having averaged roughly 5% for the last two years, the fiscal and current account deficits are small, while the employment rate is high. €25.00 Therefore, a strong recovery is expected with a projected GDP growth of 4.5% in 2021 and 5.2% in 2022. Prime Rent, Sq m/month Office investment volumes in H1 2020 reached Eur 400 million - the strongest H1 period of activity on record. Whilst Optima’s corporate acquisition of GTC accounts for over 36% of this, significant transactions such as Allianz’s acquisition of Eiffel Square illustrate Hungary’s relatively strong performance. Whilst there are examples of some aborted deals, most seem to be 5.10% proceeding. Prime Yield

(Overall, All Property Classes, as at 30 June 2020) SUPPLY & DEMAND: High supply meets with low current availability Source: Cushman & Wakefield, Budapest Research Forum Q2 demand levels in Budapest reached 88,000 sq m, which are below the trend due to the slower market activity over the crisis period. Leasing activities were dominated by renewals having a share by 55% from the total demand. Net take-up amounted to ECONOMIC 39,600 sq m and was driven by new lease transactions. Pre-leases amounted to 12,500 sq m. The office vacancy rate has INDICATORS Q2 2020 increased to 7.3%, representing a 1.1 pps uptick quarter-on-quarter, primarily due to new deliveries. Net absorption reached 31,430 sq m. YoY 12-Mo. Chg. Forecast Ongoing development schemes proceed, no delays reported yet. A total of 87,800 sq m of new space was delivered in Q2 over 1.56M five schemes. 2020 will see a strongly improved level of completions with 107,000 sq m of new supply still in the pipeline for H2, Budapest of which circa 71% is already pre-let. Employment (F) PRICING: Budapest remains Landlord favourable with no decrease in headline rents Most occupiers are in “wait-and-see” mode and rethinking their future space requirement based on their home office 5.0% experience. Large occupiers are requiring shorter terms in their renewal negotiations, whilst some excess space has been put Budapest on the market for sublease. Unemployment Rate (F) 4.8% SPACE DEMAND / DELIVERIES OVERALL VACANCY & ASKING RENT Hungary Unemployment Rate (F) 250 €26 20%

Source: Oxford Economics 200 €24 15% 150 €22 10% 100 5% Thousands €20 50

0 €18 0% 2015 2016 2017 2018 2019 H1 2020 2015 2016 2017 2018 2019 H1 2020 Net Absorption, Sq m Construction Completions, Sq m Prime rent, €/sq m/month Vacancy Rate M A R K E T B E AT BUDAPEST Office Q2 2020

MARKET STATISTICS CURRENT QTR STOCK AVAILABILITY OVERALL YTD TAKE-UP YTD COMPLETIONS UNDER CNSTR PRIME RENT SUBMARKET TAKE-UP (SQ M) (SQ M) VACANCY RATE (SQ M) (SQ M) (SQ M) (€/SQ M/MTH) (SQ M) Budapest (CBD) 367,990 19,166 5.2% 5,108 9,905 2,300 15,174 25.00

Budapest (Central Pest) 650,493 45,482 7.0% 20,316 40,725 0 66,907 17.00

Budapest (Central Buda) 435,269 37,272 8.6% 13,611 29,095 0 16,700 18.00

Budapest (Non-Central Pest) 513,239 41,046 8.0% 4,742 7,825 20,400 155,900 15.00

Budapest (North Buda) 329,863 9,350 2.8% 3,945 4,795 5,500 15,000 15.50

Budapest (South Buda) 432,824 23,940 5.5% 17,075 31,569 45,558 183,374 17.00

Budapest (Váci Corridor) 954,551 56,711 5.9% 22,302 40,201 59,552 146,347 17.50

Budapest (Periphery) 133,075 44,661 33.6% 889 3,533 0 0 11.50

BUDAPEST TOTALS 3,817,304 277,628 7.3% 87,988 167,647 133,310 599,402 25.00

KEY LEASE TRANSACTIONS Q2 2020 PROPERTY SUBMARKET TENANT SIZE (SQ M) TYPE ORSLOLYA HEGEDŰS MRICS Budapest One Phase 2 South Buda Confidential Client 8,000 pre-lease Head of Advisory & Research Budapest +36 30 399 5106 / [email protected] Ü48 Corner Center Central Pest Confidential Client 7,400 new Budapest One Phase 2 South Buda Confidential Client 4,500 pre-lease BENCE SOÓS Science Park A Central Buda Confidential Client 4,100 new Research Graduate +36 70 373 7482 / [email protected] KEY SALES TRANSACTIONS Q2 2020 cushmanwakefield.com PROPERTY SUBMARKET SELLER / BUYER SQ M A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION GTC Portfolio – 6 schemes Central Pest, Váci Corridor Lonestar / Optima 150,680 Cushman & Wakefield (NYSE: CWK) is a leading global real Eiffel Square Central Pest Equilor / Allianz 17,500 estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 KEY CONSTRUCTION COMPLETIONS YTD 2020 employees in 400 offices and 60 countries. In 2019, the firm had revenue of $8.8 billion across core services of property, PROPERTY SUBMARKET MAJOR TENANT SIZE (SQ M) OWNER/DEVELOPER facilities and project management, leasing, capital markets, AGORA Tower Váci Corridor Raiffeisen 34,500 HB Reavis valuation and other services. Budapest One P1-2 South Buda Unisys, Roche, DSV, Regus 27,400 Futureal ©2020 Cushman & Wakefield. All rights reserved. The Váci Greens F Váci Corridor Jaguar, Intrum Justicia 25,000 Atenor information contained within this report is gathered from multiple sources believed to be reliable. The information may Arena Business Campus P1 Non-Central Pest Medicover 20,400 Atenor contain errors or omissions and is presented without any warranty or representations as to its accuracy. Source: Cushman & Wakefield, Budapest Research Forum M A R K E T B E AT Office Q2 2020

YoY 12-Mo. ECONOMY: Unemployment remains low in the Czech Republic Chg. Forecast The Czech economy continues on its road to recovery, as the economic activity responds to the lifting of lockdown. Encouragingly, the number of new Covid-19 cases remains low, but there has been a local outbreak in the south-eastern 6.1% Moravia, with some virus transmission in the wider community. The government had implemented a localized response, but Vacancy Rate the outbreak is yet to be brought fully under control. €23.50 SUPPLY & DEMAND: Covid-19 undeniably affecting market activity Prime Rent, Sq m/month While new office supply remained strong both in its volume and number of projects delivered in Q2, construction activity started to slow down. Only 166,800 sq m of office space is currently under construction, with no new projects commencing during the first half of the year. On the other hand, existing pipeline projects should still be completed on time as developers 3.90% do not report any significant delays. This is also the case of larger brownfield developments in Prague. Prime Yield At the end of the first wave of the pandemic in the Czech Republic in May, most of the office employees could return to their (Overall, All Property Classes) offices, but many companies became more flexible in offering an option of working from home. Nevertheless, the share of Source: Cushman & Wakefield, Prague Research Forum pre-leases recorded was high, which means new occupiers have still been entering the market or relocating their offices. Despite a stronger demand for office space in Q2 in comparison to the previous quarter, the absorption of the market reached ECONOMIC its limit and vacancy rate started to grow faster. This trend is likely to continue until the end of the year. INDICATORS Q2 2020 PRICING: Rent levels started decreasing in non-prime locations YoY 12-Mo. Chg. Forecast With the continuously high new supply and companies’ re-structuring, landlords start to offer not only more favorable 970K conditions and incentives for tenants, but also reduced rents in some cases. However, rents prime locations still keep stable. Prague Employment 2019 3.0% Prague Unemployment Rate 3.7% SPACE DEMAND / DELIVERIES OVERALL VACANCY & ASKING RENT Czech Republic Unemployment Rate 300 €24 15% Source: Oxford Economics, Czech 250 €23 Ministry of Labor and Social Affairs 200 €22 10% 150 €21 100 €20 5%

Thousands 50 €19 0 €18 0% 2015 2016 2017 2018 2019 2020* 2016 2017 2018 2019 2020 Net Absorption, Sq m Construction Completions, Sq m Prime rent, €/sq m/month Vacancy Rate M A R K E T B E AT PRAGUE Office Q2 2020

MARKET STATISTICS

STOCK AVAILABILITY CURRENT QTR YTD TAKE-UP YTD COMPLETIONS UNDER CNSTR PRIME RENT SUBMARKET VACANCY RATE (SQ M) (SQ M) TAKE-UP (SQ M) (SQ M) (SQ M) (SQ M) (€/SQ M/MTH)

Prague 1 523,033 29,566 5.7% 18,058 28,419 24,955 10,855 23.50 Prague 2 139,943 4,652 3.3% 642 2,925 11,200 0 18.50 Prague 3 121,818 5,625 4.6% 2,418 4,286 0 1,718 17.00 Prague 4 969,553 48,307 5.0% 18,673 33,398 44,176 8,000 17.50 Prague 5 651,311 60,735 9.3% 10,146 22,563 11,290 1,690 16.50 Prague 6 191,869 23,888 12.5% 4,753 6,052 0 25,635 16.00 Prague 7 218,801 15,243 7.0% 12,879 16,942 23,953 27,373 15.00 Prague 8 579,303 24,824 4.3% 8,711 28,998 37,719 42,500 16.50 Prague 9 154,623 3,104 2.0% 2,440 4,749 18,369 49,049 13.30 Prague 10 159,506 9,984 6.3% 331 331 0 0 12.00 PRAGUE TOTALS 3,709,759 225,928 6.1% 79,049 148,663 171,662 166,820 23.50

KEY LEASE TRANSACTIONS Q2 2020 MARIE BALÁČOVÁ PROPERTY SUBMARKET TENANT SIZE (SQ M) TYPE Head of Research +420 234 603 740 /[email protected] BB Centrum B Prague 4 Undisclosed 7.428 pre-lease Myslbek Prague 1 Plzeňský Prazdroj 5,487 renegotiation EVA LISOŇOVÁ Centrum Stromovka Prague 7 TSK hl. m. Prahy 4,248 new occupation Research Analyst +420 234 603 832 /[email protected] City West C2 Prague 5 CGI Logica 3,323 renegotiation cushmanwakefield.com KEY SALES TRANSACTIONS Q2 2020 A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION PROPERTY SUBMARKET SELLER / BUYER SQ M Cushman & Wakefield (NYSE: CWK) is a leading global real City Empiria Prague 4 Generali Group/PSN 28,300 estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among City West C1 + C2 Prague 5 CFH Group/Českomoravská nemovitostní 20,400 the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. In 2019, the firm KEY CONSTRUCTION COMPLETIONS YTD 2020 had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, PROPERTY SUBMARKET MAJOR TENANT SIZE (SQ M) OWNER/DEVELOPER valuation and other services. DOCK IN FOUR Prague 8 Wrike Czech 20,400 Crestyl Parkview Prague 4 IWG (Spaces) 15,300 Skanska ©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from BB Centrum B Prague 4 Undisclosed 15,300 Passerinvest multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. Source: Prague Research Forum, Cushman & Wakefield M A R K E T B E AT WARSAW Office Q2 2020

YoY 12-Mo. ECONOMY: A strong rebound of Polish economy is expected in H2 2020/2021 Chg. Forecast The country lockdown caused by the Covid-19 pandemic has negatively affected business activity in Poland and forced most office-based individuals to work from home. Moreover, the Polish economy will most likely face a recessionary phase for the first 7.9% time since 1989 which will change the business landscape including the office sector. According to the GDP forecast provided by Vacancy Rate Oxford Economics, GDP in 2020 will drop by 3.5% while the private consumption in Q2 2020 decreased by 4.5% year-on-year according to official data released by the Polish Statistical Office. Nevertheless, Cushman & Wakefield expects strong rebound of €24.00 both indicators along with further softening of lockdown restrictions in the next quarters. Prime Rent, Sq m/month SUPPLY & DEMAND: 256,400 sqm of modern office space will be delivered in H2 2020 Total office stock in Warsaw in the first half of 2020 increased by 106,800 sqm in five office projects and reached 5.69 million 4.50% sqm. During the first six months of 2020, the market witnessed completion of projects such as: Varso I&II (39,900 sqm and 6,500 Prime Yield sqm – HB Reavis), Chmielna 89 (25,150 sqm – Cavatina), DSV HQ (20,035 sqm – DSV) and a further phase of Warsaw Source: Cushman & Wakefield Brewery complex – The Villa Offices (14,940 sqm – Echo Investment). During lockdown, there wasn’t any legislation introduced to limit construction works in Poland. Nevertheless, due to protracted administrative procedures, limited labour availability and potential disruptions to supply chains, some office projects were postponed from Q2 to Q3. ECONOMIC The lockdown and general uncertainty related to the impact of Covid-19 on the economy caused some tenants to temporarily INDICATORS Q2 2020 suspend decisions on ongoing lease negotiations. Nevertheless, total leasing activity in the first half of the year amounted to 334,800 sqm and was 17% lower than in the corresponding period of 2019. Moreover, most of the transactions concluded in the YoY 12-Mo. Chg. Forecast first half of the year are still processes which started long before the outbreak of the pandemic. The largest transactions include: pre-lease agreement in Generation Park Y by PZU (46,500 sqm), the DSV lease concluded with the buyer of their building in 1,061K Mokotów (20,035 sqm) and the renegotiation by Poczta Polska (19,010 sqm) in Domaniewska Office Hub. Warsaw Employment PRICING: Rental rates under preasure but remained unchanged Despite worsening sentiment among market participants, prime headline rents remained unchanged and stood at EUR 1.6% 24/sqm/month for the city centre and EUR 15/sqm/month for non-central locations. The prime headline rents in Warsaw Warsaw remained unchanged in Q2 2020 because most of the transactions were closed based on pre-pandemic terms. In the upcoming Unemployment Rate quarters, Cushman & Wakefield expects a correction of prime headline rents if the demand for office space sees further decline. 6.0% SPACE DEMAND / DELIVERIES OVERALL VACANCY & ASKING RENT Poland Unemployment Rate 500 €26 20%

Source: GUS 400 €24 15%

300 €22 10% 200

Thousands €20 5% 100

0 €18 0% 2015 2016 2017 2018 2019 H1 2020 2015 2016 2017 2018 2019 2020

Net Absorption, Sq m Construction Completions, Sq m Prime rent, €/sq m/month Vacancy Rate M A R K E T B E AT WARSAW Office Q2 2020

MARKET STATISTICS

CURRENT QTR YTD STOCK AVAILABILITY YTD TAKE-UP UNDER CNSTR PRIME RENT SUBMARKET VACANCY RATE TAKE-UP COMPLETIONS (SQ M) (SQ M) (SQ M) (SQ M) (€/SQ M/MTH) (SQ M) (SQ M) Central Business District 930,300 53,250 5.7% 25,800 38,850 46,650 151,200 24.00 City Centre 1,341,100 60,550 4.5% 86,800 136,200 40,100 452,400 20.25 East 235,100 20,300 8.6% 2,200 8,200 21,500 15.00 Jerozolimskie corridor 735,500 41,850 5.7% 7,400 17,000 15,000 15.00 Mokotów 1,457,700 205,850 14.1% 67,300 112,000 20,050 46,200 14.50 North 120,200 9,350 7.8% 4,400 14.50 Puławska corridor 192,600 9,250 4.8% 6,650 13.50 Ursynów & Wilanów 126,600 7,100 5.6% 1,600 1,800 15.00 West 252,400 16,900 6.7% 2,700 3,800 2,800 15.00 Żwirki i Wigury corridor 296,300 23,800 8.0% 2,100 5,900 14.50 Warsaw Total 5,687,800 448,200 7.9% 195,900 334,800 106,800 689,100 15.00/24.00

KEY LEASE TRANSACTIONS H1 2020 KATARZYNA LIPKA PROPERTY SUBMARKET TENANT SIZE (SQ M) TYPE Head of Consulting & Research +48 606 993 860 / [email protected] Generation Park Y City Centre PZU 46,500 Prelet DSV HQ Mokotów DSV 20,050 New JAN SZULBORSKI Domaniewska Office Hub Mokotów Poczta Polska 19,000 Expansion & Renewal Senior Consultant Konstruktorska BC Mokotów Confidential 17,500 Renewal +48 722 202 933 / [email protected] cushmanwakefield.com KEY SALES TRANSACTIONS H1 2020 A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION PROPERTY SUBMARKET SELLER / BUYER SQ M Cushman & Wakefield (NYSE: CWK) is a leading global real D48 Mokotów Penta/IAD Investments 26,500 estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among Nowogrodzka Square City Centre Yareal/Amundi Real Estate 11,500 the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. In 2019, the firm KEY CONSTRUCTION COMPLETIONS YTD 2020 had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, PROPERTY SUBMARKET MAJOR TENANT SIZE (SQ M) OWNER/DEVELOPER valuation and other services. Varso II Centra Business District CIC, BGK 40,000 HB Reavis Chmielna 89 City Centre PKO 25,200 Globalworth ©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from DSV HQ Mokotów DSV 20,050 Corum AM multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. Source: Cushman & Wakefield