Warsaw Crane Survey 2021 Crane Survey 2021

Contents

Introduction 3 Key findings 4 Building permits and application analysis 6 Unutilised building permits 8 Revitalisation is the important trend in Warsaw 9 The race for height 10 Warsaw’s Office Market 12 Śródmieście: Is a central location the future? 13 on the rise 15 Construction numbers are decreasing in Mokotów 17 No new building permits in 19 Office stock in Włochy 20 Revitalised schemes are dominant in office stock 21 Non-business districts 22 What will Warsaw of the future look like? 23 Methodology 25 Contacts 26

2 Warsaw Crane Survey 2021

Introduction

Welcome to the second edition of the Deloitte Warsaw Crane Survey. The Warsaw office market has reached maturity after three decades of spectacular development. Since 1990, when the supply was very limited following the fall of communism, now the stock of modern office space has grown to more than 5.6m sqm. However, in the two editions of our What? survey, one of the most interesting findings has been the decreasing number of building permits issued for office developments. Is this a sign The Crane Survey measures the volume of office development in Warsaw. We have analysed all of an approaching slowdown? Has the impact of COVID-19 affected the number of projects underway and the volume of construction work on building permits for schemes with a GLA over office projects in Warsaw? 2,500 sqm issued in the last eleven years.

The Deloitte Warsaw Office Crane Survey 2021 We have also looked at other administrative decisions. How? is a barometer of business activity in ’s capital, These include WZ decisions, defining the conditions We have taken a street-level view of Warsaw in which we examine Warsaw’s current office stock and under which a development may be launched. Although to monitor all office construction underway, future potential supply. As current stock is easy to track 60% of the city is not yet covered by local plans, we can verifying our observations with data from the using abundant market data we decided in the first take into account most of Warsaw’s land area by looking Architecture & Planning Department of Warsaw edition to focus on future as well as current office stock. at WZ decisions. This allows us to investigate future City Administration and our in-house real estate The Crane Survey is unique in analysing the modern office projects in most of the city. experts. stock in all Warsaw’s districts with a special focus on building permits and administrative decisions. Through The two building permits issued for large schemes When? a collaboration with the City of Warsaw, we have also confirm the trend seen in the last few years: that The survey covers the last 11 years (2010-2020). analysed the building permits issued during the last developers are building larger and higher schemes. We 11 years, giving us a complete overview of the trends can see more revitalisation and mixed-use projects. influencing developer activities. Where? We hope you find this report a valuable tool for Dominik Stojek The report covers all districts within Warsaw’s The Crane Survey measures the volume of office understanding the Warsaw office market. Partner Associate city administrative boundaries. development in Warsaw. We have analysed the building Real Estate Advisory permits issued during the last decade for schemes with Who? a gross leasable area (GLA) of more than 2,500 sqm. The report is addressed to all real estate market players, including developers, investment funds, advisors, investors, financial and administrative institutions.

3 Warsaw Crane Survey 2021

Key findings

• The 2020 data confirms that the pandemic has • After record-breaking 2016, when around 400,000 sqm • The low occupancy rate across several new projects, strengthened the existing slowdown in Warsaw’s of new stock was delivered, the market saw three combined with the second-highest amount of office market for new office projects. In the previous edition of consecutive years of decline in the delivery of modern stock to come to market in a single year (after the the Warsaw Crane Survey, we reported that 17 building office stock. In 2020 at more than 300,000 sqm, we record-breaking 2016), is likely to reduce future planned 2 permits for office and service projects were issued saw the the second-highest amount of new office supply. new building permits for office projects in 2020 in 2019, 7 of which were for modern office stock. In stock delivered to the Warsaw market in a single year. • The COVID-19 pandemic has influenced tenants’ (7 in 2019) 2020, only two such building permits were issued: the Furthermore, according to construction schedules, decisions to postpone or halt much planned expansion Skanska project located at Łucka Street (former the new stock planned for 2021 will exceed last year’s and many new lease agreements. This may stretch yet Impexmetal), next to Art.Norblin; and The Bridge results. further the gap between net demand and the new stock 0 new applications for office building permits filled of Ghelamco, located next to scheme. • While the average vacancy rate across Warsaw is to be delivered this year. in 2020 There is a significant discrepancy between numbers of around 10%, several office schemes that either opened issued building permits (2 vs. 7 in 2019), however the in recent months or will be delivered in 2021 have difference in GLA is only 10% lower. This confirms our relatively high vacancy rates of more than 40%. ca. 62,000 conclusions from the last report - we are building fewer estimated GLA of building permits for office but larger projects. projects issued in 2020 (-27% y/y)

Correlation of building permits and projects commissioning Number of building permits and planned GLA for modern office buildings 100% 700 000 700 000 45 of building permits issued in 2020 are located in 40 Wola district 600 000 600 000 35 500 000 500 000 30 over 300,000 400 000 400 000 25 stock delivered to the market in 2020

300 000 300 000 20

GLA (sqm ) GLA (sqm ) 15 over 380,000 200 000 200 000 10 stock forecasted to be delivered to the market 100 000 in 2021 100 000 5

0 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 over 5.6m total modern office stock in Warsaw GLA of issued building permits GLA of commissioned projects GLA Number of buildings

4 Warsaw Crane Survey 2021

Average period between obtaining building permit and building commissioning Building permits obtained by developers in terms of GLA 5 The most building permits in the last 11 years were issued for Wola district (47) with a total 17% 4 Ghelamco leasable area of 1.1 million sqm

HB Reavis 3 Skanska 12% 16 building permits, issued before 2016, where 2 Echo Investment construction works still did not start 50% PHN 1 9% Karimpol 27 office projects with a building permit, at the inne 0 planning or construction stage (as of 31/12/2020) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 5% 3% 4%

On-going investment processes (considering time from obtaining building permit and commisioning of a building) Warsaw’s Top 6 GLA of building permits obtained by developers in the last 11 years

1 500 000 100 GLA (sqm) Number of projects

Ghelamco 449 000 13 80

1 000 000 HB Reavis 290 000 7 60 Skanska 226 000 12 40 500 000 Echo Investment 135 000 7

20 PHN 91 000 3

0 0 Karimpol 70 000 2 2010 20112012 2013 2014 20152016 2017 20182019 2020

GLA Number

5 Warsaw Crane Survey 2021

Building permits and application analysis

Building permits analysis indicators including applications for building permits and According to the market and report methodology, only development conditions (hereinafter referred to as WZ two building permits for modern office developments decision). were issued in 2020. The first of these was for the Skanska 40% project located at Łucka Street (formerly Impexmetal - At least five applications for WZ decisions appeared in The area covered by local plans in Warsaw. ca. 15,000 sqm), next to the Art.Norblin scheme. 2020 for office projects or mixed-use developments WZ decisions apply in 60% of the Warsaw area. including an office element. Developers are currently 26% of plans are under preparation. The second permit, issued in mid-December 2020, was preparing new projects, which will be realised once the for The Bridge (ca. 47,000 sqm), the new office project of current market slowdown is over. However, none of Ghelamco, formerly known as Bellona Tower. applications for building permits we saw were for new Intraco Prime office schemes. This may indicate a longer slowdown for Drucianka During analysis we did not notice any new application for construction in the years ahead. Plac Grzybowski a building permit. The Bridge There are signs of a shift of focus in older projects, away Development conditions from offices to other uses such as residential or hotel. Łucka 5/7 Dobra To help us predict future construction trends, as well as the building permits issued we looked at other Lixa (next phase)

Towarowa 22 Złota 58/64 Dor Plaza Building permits by year for buildings commissioned in 2020 P180

9 8 7 6

5 Equinix 4 3 Construction started 2 Issued building permits 1 Issued WZ Decisions 0 2012 2013 2014 2015 2016 2017 2018 Application of WZ Decision

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Building permits replaced by residential function Office function replaced by residential Construction work has not started on the Libero Tower During our analysis of the Crane Survey’s findings, we saw Echo Investment is planning to develop a primarily (Burakowska St.), although a permit has been issued. This several projects which have changed or are set to change residential mixed-use scheme next to Wołoska Street is due to the planned change of use of the scheme from their use. These projects are at different stages. in Służewiec. An application based on the ‘Residential Act’ office to residential. is in the consultation process and will be processed by Selected issued building permits for office projects which have been repurposed the City Council in 2021. There are several residential-for-rent projects located in areas where local plans are dedicated to service Project name Address Current function In recent months, applications to change planning infrastructure. One example of this is at Woronicza Street Infinicity Postępu, Mokotów Residential conditions under WZ decisions were lodged for two in the Mokotów District. projects: Jasna 24 in central Warsaw and Jerozolimskie Cube Postepu, Mokotów Residential 133a in the Ochota district. The second of these is P4 / Vienna House Postępu, Mokotów Aparthotel currently a mixed-use scheme with residential and office elements. West Point 120 / Modern Space Wiktoryn, Włochy Residential (Micro-apartments) During analysis we have also identified an application to Amber Mokotów Konstruktorska, Mokotów Residential change the building permit for Orbis’s Bracka 16 scheme Jerozolimskie Invest Aleje Jerozolimskie, Włochy Residential (Micro-apartments) from office to hotel use.

Selected office schemes that may be replaced by residential

Project name Address Possible function

Empark (partially) Wołoska, Mokotów Residential

Jasna 24 Jasna, Śródmieście Residential

Jerozolimskie 133a Aleje Jerozolimskie, Ochota Residential

7 Warsaw Crane Survey 2021

Unutilised building permits

Warsaw has several plots with building permits for The Adgar Plaza West D building in Ochota has had modern office buildings, which have been publicly a building permit since 2015. In the Włochy district, work announced but have not yet started. has not yet started on White Gardens, located next to the Żwirki i Wigury and Komitetu Obrony Robotników In Wola, although demolition works have been carried crossing, close to Chopin Airport. It is the same story at out at Twarda 30 (Skanska), next to Rondo ONZ, new the nearby complex at 1 Sierpnia Street, close to Rakowiec construction has not started. Another Skanska project railway station. And, although the fourth complex at the that is waiting for construction to begin is Spark A, next Aeropark Business Center obtained its building permit as to Solidarności and Okopowa streets. Although the long ago as 2010, it has not been utilised. Towarowa 30 project was awarded a building permit in 2019, the project has not been announced. The Liberty Tower and Libero projects are other examples of unutilised building permits.

In Mokotów, Skanska’s Hello at Idzikowskiego Street and Postępu 2 of Ghelamco are among the projects where construction work has not started.

8 Warsaw Crane Survey 2021

Revitalisation is the important trend in Warsaw

In recent years, Warsaw has featured several regeneration The largest revitalisation project in Wola that will be Selected revitalisation projects in Warsaw and refurbishment projects. Including new buildings commissioned in the near future is Fabryka Norblina, in historic complexes, these account for around based in former industrial facilities next to the Mennica 360,000 sqm of the city’s office stock. Legacy scheme.

The highest share of such projects has traditionally been Revitalisation projects are also a continuing trend on in central parts of the city, including Plac Małachowskiego, the right bank of the River. The Bohema project Ufficio Primo, Cedet (a former retail site), Europejski and is ongoing, with modern office stock planned during EC Powiśle (a former power plant). the project’s stage B (due for commissioning in Q1 2022) and stage D (Q4 2023). In addition, the In 2020, two office schemes were opened in the mixed- Monopol project, part of Centrum Praskie Koneser Bohema (u/c) use Browary Warszawskie project. The scheme is located (buildings M and N), will open in 2021. The Praga District within former brewery in the Wola district. The Biura przy too will see further revitalisation projects. The investor Drucianka (planned) Warzelni and Biura przy Willi projects collaborated to in the Centrum Praskie Koneser development has applied Koneser (u/c) Praga 306 open the Biura przy Bramie (Gatehouse Offices) building for a WZ decision for the mixed-use project at the former in 2019. The Browary Warszawskie scheme features retail Drucianka factory, which will include an office park. Wola Retro and residential components, including residential-for- EC Powiśle rent. And the Wola Retro office complex, opened in 2019, Browary Warszawskie is a refurbishment of a modernist office building from the 1930s. Fabryka Norblina (u/c) Hala Koszyki

Building permits for office projects in revitalised buildings or complexes (including new schemes within such) Fort Mokotów

35 000

30 000

25 000

20 000

15 000

10 000

5 000

0 2010 2011 2012 2013 2014 2015 2016 2017 2018 20192020

9 Warsaw Crane Survey 2021

The race for height

The Warsaw skyline is changing rapidly, mostly due to Multiple schemes of over 100 metres in height have been multiple office investments. A dozen office projects are delivered in the Rondo Daszyńskiego area, including the over 100 metres in height. Skyliner, , Warsaw Hub and the nearby Mennica Tower. The tallest skyscraper in the European Union, Tower, reached its full height at the beginning of 2021. As well as Varso Tower, Warsaw Unit, Forest and Skysawa At 310 metres including its spire, Varso Tower surpasses are also under construction. Despite the pandemic, in 2020 The Shard in . The building, which is currently Orbis made an application for building conditions for a new under construction at the border of Śródmieście and Wola scheme with two buildings at Złota St. The project may districts, next to the Central Railway Station, is also the include a new skyrise office tower. tallest in Poland in terms of height to the roof. The wider Foster + Partners’s project consisting of Varso Tower Changes to the skyline are predicted in the city centre and (planned for 2022) and the already opened Varso I and Wola as well as in the Praga harbour and National Stadium Varso II buildings will collectively offer over 120,000 sqm. area, where the new masterplan may allow high-rise buildings.

Tallest modern office buildings in Warsaw

Year Asset District Height (m)

2022 Varso (u/c) Wola 310

2016 Warsaw Spire Wola 220

1999 Wola 208

2021 Warsaw Unit Wola 202

2016 Śródmieście 195

2021 Skyliner (u/c) Wola 195

2006 Śródmieście 192

2021 Generation Park Y (u/c) Wola 180

Varso Place, HB Reavis

10 Warsaw Crane Survey 2021

Varso Tower (u/c) Palace of Culture Year and Science 2022 Year Warsaw Spire Height 1955 Year Height Warsaw 310m 2016 237m Height Trade m Tower 220 Year 1999 Height Warsaw Unit 208m Year 2021 Height Q22 202m Year 2016 Skyliner Height Year 195m 2021 Rondo I Height Year Generation 195m 2006 Park Y Height Year Centrum 192m 2021 LIM Warsaw Height Year Year Financial 180m 1989 Height 1998 Center 170m Height 165m

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Warsaw’s Office Market

Today, Warsaw’s total office stock exceeds 5.6 million sqm The largest volume of office stock, of around 1.5m sqm, GLA of building permits issued for modern office schemes between 2010 and 2020 of leasable space. is located in Mokotów. Wola and Śródmieście offer almost equal amounts of gross leasable space: 1.25m sqm. Over 300,000 sqm of new office stock came to market in Warsaw in 2020. Year 2021 will see around 380,000 sqm Stock in the Ochota and Włochy districts exceeds of additional office space. These are the two highest 500,000 sqm. No other district of Warsaw offers more results of the last decade, apart from 2016 when more than 200,000 sqm. Białołęka than 400,000 sqm of new office space was delivered. 9,000 sqm

Total stock in main office districts

2 000 000 1 800 000 6,000 sqm Targówek 1 600 000 Praga Północ 1 400 000 52,000 sq 1 200 000 Żoliborz 13,000 sqm 1 000 000 800 000 8,000 sqm m 600 000 Śródmieście 286,000 sq GLA (sqm ) Praga 400 000 Wesoła 200 000 Wola Południe 0 1,165,700 sqm Wola MokotówŚródmieście Włochy Ochota m existing under construction planned Ochota 174,000 sqm Ursus Total stock in non-business districts 23,000 sqm 1,300 sqm Mokotów 250 000 538,000 sqm Włochy 200 000 172,000 sqm

150 000

100 000 Wilanów 16,000 sqm

GLA (sqm ) 50 000 Ursynów 0 28,000 sqm UrsynówPraga Praga Żoliborz WilanówBielany WawerBemowoBiałołęka UrsusTargówek Południe Północ existing under construction planned

12 Warsaw Crane Survey 2021

Śródmieście: Is a central location the future?

Neither new building permits nor WZ decisions for office Existing stock: 1,251,000 sqm schems in the central part of Warsaw were issued in 2020. Stock under construction: 96,000 sqm Planned stock: 41,000 sqm

In 2020 only Orbis applied for a WZ decision for two towers, Central Point (2021) to replace an existing hotel. Two towers may therefore Plac Grzybowski (WZ appl.) appear in close proximity to the Złota 44 residential tower 1 and the Lumen and Skylight office buildings. 5

Another applications for a WZ decision concern plots next to Plac Grzybowski (Ghelamco) and Dobra Street (Powiśle). In addition, Zeitgeist applied for a WZ decision on plot number 64/4, between Nowogrodzka and Św. Barbary streets. The scheme may include office project and two

residential buildings. Śródmieście Orbis (WZ application)

Wola Widok Towers (2021) 3 2 Selected office projects and developers’ plans Varso (2022) No. Project name GLA (sqm) Status Planned opening

1 Central Point 18 000 Under construction 2021

Nowogrodzka (WZ application) 2 Widok Towers 28 600 Under construction 2021

Złota 48/54 (Orbis) 4 3 n/d Application for WZ n/d Office and hotel towers Shading analysis for central Warsaw

Nowogrodzka/Św. Barbary (Zeitgeist) 4 n/d Application for WZ n/d Residential and office scheme Number of buildings under construction and refurbishment in 5 Plac Grzybowski (Ghelamco) 35 000 Application for WZ n/d the last decade in Śródmieście 6 Dobra 36/38 (White Star) n/d Application for WZ n/d district

under construction Highest – 23 (years 2013 - 2014) WZ application Today – 5 Lowest – 5 (years 2019 - 2020)

13 Warsaw Crane Survey 2021

Last year, the City of Warsaw ordered an analysis may help with planning the locations of the new office and of the sunlight and shadow implications of locating residential schemes. If the findings are positive, five new new high-rise buildings at Chałubińskiego, Emilii Plater tall buildings may appear in this area. SŁONIMSKIEGO and Nowogrodzka streets and Aleje Jerozolimskie. NEW TOWN Although the area was covered by a local plan, in The new local plan for the ‘Eastern Wall’ area, including 6,500 sqm Q1 2021 certain parts of this plan were abolished by Central Railway Station, is on the way. During the winter M2 the voivodeship administration and building conditions we saw a public consultation in advance of the plan going MURANÓW 168,000 sqm decisions were applied. The latest light and shade study live, which is scheduled for 2024. OLD TOWN MOST ALEJA JANA PAWŁA II 11,200 sqm

ŚLĄSKO-DĄBROWSKI

Number of building permits and planned GLA for office buildings VISTULA 70 000 6 60 000 5 ŚRÓDMIEŚCIE POWIŚLE 37,500 sqm 50 000 SOLIDARNOŚCI 4 PÓŁNOCNE 40 000 588,500 sqm

3 83,100 sqm (u/c) MOST 30 000 OWSKIEGO PONIAT 2 GLA (sqm ) 20 000

10 000 1 SOLEC

0 0 MARSZAŁKOWSKA 38,600 sqm 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GLA Number of buildings

ALEJE JEROZOLIMSKIE ŚRÓDMIEŚCIE New office stock in Śródmieście POŁUDNIOWE 401,500 sqm 120 000 TRASA ŁAZIENKOWSKA

100 000 UJAZDÓW

80 000

60 000

40 000 GLA (sqm )

20 000

0 Total modern office stock in district. 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

14 Warsaw Crane Survey 2021

Wola on the rise

News from the market 2020 Existing stock: 1,303,000 sqm Both of the office projects for which building permits Stock under construction: 338,000 sqm were issued in 2020 are located in Wola: The Bridge Planned stock: 158,000 sqm (ca. 47,000 sqm - Ghelamco) at Grzybowska St. and POWĄZKI the Łucka 5/7 project (ca. 15,000 sqm - Skanska) 3,500 sqm 71,000 sqm between Łucka and Prosta St. (u/c) JANA PAWŁA II

The first ground works have already started at The Bridge, KOŁO located between Plac Europejski and Grzybowska St. 16,000 sqm NOWOLIPKI The project will include modernisation of the post-war 48,000 sqm Bellona office building and alterations to the modernist

Grzybowska 73 tenement house. Initially, the whole office GÓRCZEWSKA PRYMASA TYSIĄCLECIA MŁYNÓW tower project was planned to replace the Bellona building, 21,000 sqm but now the building will be preserved. ULRYCHÓW

5,000 sqm DASZYNSKI ROUNDABOUTMIRÓW 760,200 sqm

WOLSKA TOWAROWA202,200 (u/c) New office stock in Wola KASPRZAKA 350 000 427,200 sqm 64,000 sqm (u/c) 300 000 ODOLANY POŁCZYŃSKA 13,000 sqm 250 000 ALEJE JEROZOLIMSKIE

200 000

150 000

GLA (sqm ) 100 000

50 000 Number of buildings under 0 construction and refurbishment in 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 the last decade in Wola district 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Total modern office stock in district.

Highest – 24 (year 2018) Today – 21 Lowest – 9 (year 2013)

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Wola is the district with the highest total GLA from More applications for WZ decisions relating to Wola have Number of building permits and planned GLA for office buildings obtained building permits. The differences between been made. These include the first application for Echo 400 000 16 districts increased in 2020, meaning Wola again leads Investment’s Towarowa 22 project, which was lodged in terms of stock opened in 2020 as well as space under in January 2021. This mixed-use scheme, designed 350 000 14 construction. by the famous BIG Bjarke Ingels Group, was first 300 000 12 announced in 2019 during MIPIM exhibition. 250 000 10 Construction was completed for 11 schemes during 2020, and the next seven projects will be delivered 200 000 8 to the market in 2021. These two years will result 150 000 6 GLA (sqm ) in almost 600 thousand of new office space. 100 000 4

50 000 2 The first construction works started on the site of Lixa E in Q1 2021. The building permit for the next building in 0 0 this complex was issued in 2019. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GLA Number of buildings

Largest openings in 2020 and 2021 Selected office projects and developers’ plans in Wola District

No. Project name GLA (sqm) Status Opening Project name GLA (sqm) Status Planned opening

1 The Warsaw Hub (B & C) 87 000 Opened 2020 Varso Tower (HB Reavis) 70 500 Under construction 2022

2 Forest (complex) 71 400 Under construction 2021 The Bridge (Ghelamco) 47 000 Under construction 2024

3 Varso (I & II) 64 700 Opened 2020 Prymasa Tysiąclecia 83 (PHN) 15 400 Under construction 2023

4 Warsaw Unit 57 000 Under consturction 2021 Lixa E (Yareal) n/d Under construciton 2023

5 Mennica Legacy Tower 44 900 Opened 2020 Łucka 5 (Skanska) n/d Obtained building permit n/d

6 Skyliner 44 900 Opened 2021 Spark A (Skanska) n/d Obtained building permit n/d

7 Generation Park Y 44 200 Opened 2021 Towarowa 22 (Echo) n/d Application for WZ decision n/d

8 Browary Warszawskie: 39 000 Opened 2019 Biura przy Willi, Biura przy Warzelni 2020

16 Warsaw Crane Survey 2021

Construction numbers are decreasing in Mokotów

Currently, around 51,000 sqm of office space is under Existing stock: 1,540,000 sqm construction in the district, mostly outside the Służewiec Stock under construction: 51,000 sqm and neighbouring areas traditionally known as Warsaw’s Planned stock: 73,000 sqm office district. However we have noticed “rising market” in Kolonia subdistrict due to new office schemes under construction. MOST SIEKIERKOWSKI

Construction was completed at the X20, Kolonia Sielce VISTULA and Moje Miejsce (B2) projects during 2020. X20 and Moje Miejsce obtained their building permits in 2018, and the office component of Kolonia Sielce received its permit STARY in 2016. MOKOTÓW CZERNIAKÓW 130,000 sqm 13,000 sqm SIELCE Construction is currently on-going at Skanska’s P180 site, 129,450 sqm located close to the Wilanowska underground station. WYGLĘDÓW 16,000 sqm (uc) AUGUSTÓWKA 34,000 sqm 24,000 sqm PUŁAWSKA

New office stock in Mokotów WOŁOSKA 200 000 SOBIESKIEG KSAWERÓW 17,000 sqm 180 000 SŁUŻEWIEC 308,000 sqm O 845,000 sqm 160 000 29,000 sqm (u/c) 21,200 sqm 140 000 120 000

ALEJA WILANOWSKA 100 000 SŁUŻEW 80 000 18,000 sqm

GLA (sqm ) 60 000 40 000 DOLINA SŁUŻEWIECKA 20 000 Number of buildings under 0 construction and refurbishment in 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22

20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 the last decade in Mokotów distric

Highest – 23 (years 2013 - 2014) Total modern office stock in district. Today – 3 Lowest – 3 (years 2019 - 2020)

17 Warsaw Crane Survey 2021

As mentioned earlier in the report, Mokotów has The owner of Empark, Echo Investment is planning to a large share of projects that have been repurposed rearrange the urban structure next to Wołoska Street as residential, residential-for-rent or hotel schemes. by introducing residential property, more greenery This trend is particularly visible in the Służewiec area. and areas for relaxation and leisure. In March 2021 an In addition, residential-for-rent projects are appearing application based on the ‘Residential Act’ entered the in areas designated in local plans for service consultation process and will be processed by the City infrastructure. Council. The project will replace part of current office complex Empark. There has been a noticeable slowdown in new office investments during the last few years.

Number of building permits and planned GLA for office buildings

140 000 12

120 000 10

100 000 8 80 000 6 60 000

GLA (sqm ) 4 40 000

20 000 2

0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

GLA Number of buildings

The mixed-use scheme of Echo Investment which may replace Empark office complex

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No new building permits in Ochota

No building permits for modern office buildings have Existing stock: 555,700 sqm been issued for Ochota since 2015, and no schemes are Stock under construction: 0 sqm currently under construction. Although the Adgar Park Planned stock: 41,400 sqm West D project received building permission in 2015, it is currently suspended. The Jerozolimskie 140 building in the XCity scheme is planned for after 2023.

Number of obtained building permits and planned GLA for office buildings in Ochota district

100 000 90 000 3 80 000 FILTRY 70 000 59,000 sqm 60 000 2 STARA OCHOTA 50 000 267,000 sqm TRASA ŁAZIENKOWSKA 40 000

GLA (sqm ) 30 000 1 20 000 10 000

0 0 E 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GLA Number of buildings SZCZĘŚLIWICE ALEJE JEROZOLIMSKI 186,000 sqm

GRÓJECKA New office stock in Ochota

RAKOWIEC Y 80 000 44,000 sqm 70 000

60 000 ŻWIRKI I WIGUR 50 000 40 000 30 000

GLA (sqm ) 20 000 Number of buildings under construction in the last decade 10 000 in Ochota: 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Total modern office stock in district. Highest – 6 (years: 2010, 2012, 2015) Today – 0 Lowest – 0 (year 2019)

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Office stock in Włochy

The largest number of building permits for modern office Existing stock: 528,000 sqm buildings in Włochy was issued in 2012. The building Stock under construction: 24,600 sqm permit for the next stage of The Park Warsaw was issued Planned stock: 108,000 sqm NOWE WŁOCHY in 2019. The Park Warsaw and Flanders Business Park are

ALEJE JEROZOLIMSKIE under construction. White Gardens and Aeropark both STARE have as yet unused building permits. WŁOCHY 89,000 sqm The building permit for an office scheme at Wiktoryn St. RAKÓW was not utilised, and a residential scheme is under 121,000 sqm 9,000 sqm (u/c) ŻWIRKI I WIGURY construction in its place. SALOMEA ŁOPUSZAŃSKA 58,600 sqm Number of obtained building permits and planned GLA for office buildings in Włochy districts 70 000 10 9 60 000 8 SASANKI 50 000 7 OKĘCIE OPACZ 40 000 6 204,000 sqm 5 WIELKA 30 000 4 13,400 sqm ALEJA KRAKOWSKA S8

GLA (sqm ) 20 000 3 2 10 000 1 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ZAŁUSKI GLA Number of buildings 32,600 sqm

S79 S2 New office stock in Włochy

60 000

50 000 PALUCH 40 000

30 000 Number of buildings under construction in the last decade 20 000

GLA (sqm ) in Włochy: 10 000

0 S2 Total modern office stock in district. Highest – 20 (year 2010) 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22

20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Today – 3 Lowest – 3 (year 2020)

20

S2 Warsaw Crane Survey 2021

Revitalised schemes are dominant in Praga office stock

A significant share of the office stock in Praga Północ building (Phase B), and buildings D and E (Phase D). and Praga Południe is included in revitalisation and refurbishment projects, with examples including In recent months, the City of Warsaw received an Praga 306 and Centrum Praskie Koneser. application for a WZ decision for the Drucianka scheme involving a former factory located close to East Railway The final two buildings in the Centrum Koneser Station. (18 000 sqm) project, located in the former distillery at

RADZYMIŃSKA Ząbkowska Street, are under construction within the The development of metro network in both districts may PELCOWIZNA borders of the historic quarter. lead to the appearance of further new projects.

Another such project is Bohema (5 000 sqm), a mixed-use Praga Północ Praga Południe NOWA PRAGA scheme in a former factory next to the recently opened Existing stock: 69,300 sqm 122,800 sqm 8,500 sqm SZMULOWIZNA 10,000 sqm (u/c) 27,000 sqm OLSZYNKA Szwedzka metro station and Warszawa Targówek railway Stock under construction: 23,000 sqm 0 sqm 9,000 sqm (u/c) GROCHOWSKA station. The scheme’s office space is in the Glicerynownia Planned stock: 0 sqm 0 sqm STARA GROCHÓW Number of obtained building permits and planned GLA for office buildings in Praga Północ and Południe districts PRAGA 34,000 32,000 sqm 20 000 27,000 sqmGROCHOWSK MOST ŚLĄSKO-DĄBROWSKI sqm A 18 000 4 YCH GROCHOWSKA 16 000 ON VISTULA GOCŁAWEK 14 000 3 12 000 9,000 sqm 10 000 M2 ANÓW ZJEDNOCZ OSTROBRAMSKA 8 000 2 AL.ST 6 000 MOST PONIATOWSKIEGO GLA (sqm ) SASKA KĘPA 4 000 1 2 000 12,000 sqm GOCŁAW 0 0 43,000 sqm 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 GLA Number of buildings MOST ŁAZIENKOWSKI TRASA SIEKIERKOWSKA

New office stock in Praga Północ and Praga Południe districts

30 000 MOST SIEKIERKOWSKI 25 000 Praga Południe Praga Północ Number of buildings under 20 000 construction in Praga Północ and 15 000 Praga Południe the last decade 10 000 GLA (sqm ) 5 000 Total modern office stock in district. Highest – 8 (years 2015, 2017) 0

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Today – 3 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 Praga Południe Praga Północ Lowest – 3 (years 2018, 2019, 2020)

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Non-business districts

Developers who build modern office schemes have Total existing stock: 337,100 sqm limited interest in other areas of Warsaw. Several schemes Total stock under construction: 5,000 sqm (Ursynów) MODLIŃSKA are located next to main transportation corridors. More Planned stock: 13,500 sqm than 150,000 sqm of Ursynów’s approximately BIAŁOŁĘKA 200,000 sqm of office space is located next 13,000 sqm to the Służewiec office area, the Puławska corridor and 7 S8 . In other districts largest stock is offered in Żoliborz and Wilanów.

BIELANY Total office stock in non-business districts S8 27,400 sqm TARGÓWEK 250 000 7,300 sqm

S8 200 000 ŻOLIBORZm REMBERTÓW 51,000 sq 150 000 BEMOWO M2 13,700 sqm 100 000 WESOŁA GLA (sqm ) 50 000 M2

0 S8 VISTULA Ursynów Żoliborz Wilanów Bielany Wawer Bemowo Białołęka Ursus Targówek METRO WAWER existing under construction planned 13,000 sqm URSUS 5,000 sqm (u/c) S2 7,900 sqm POWSIŃSKA

New office stock in non-business districts PUŁAWSKA

60 000

50 000 DOLINA SŁUŻEWIECKA WILANÓW 40 000 40,800 sqm URSYNÓW 30 000 202,600 sqm

GLA (sqm ) 20 000 S2 10 000

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Bemowo Białołęka Bielany Targówek Ursus Ursynów Wawer Wilanów Żoliborz PUŁAWSKA

22 Warsaw Crane Survey 2021

What will Warsaw of the future look like? A word from Warsaw’s City Architect

Once the pandemic is over, we want the city to Green, climate-resistant and convenient for people We share our knowledge and thinking on all of this in our grow rapidly but more sustainably too. It must be The Warsaw of the future, the one we will see in 10, 20 or City Reports, which promote our work on the Study for resistant to the projected challenges and crises of 30 years, will be a better place in which to live and work. Warsaw. the 21st century and this is what we are planning We know it will grow; not rapidly but gradually. We’ve for in our new Study of Conditions and Spatial assumed that in 2050 the number of its citizens will be Remote, in the office, or hybrid: What will our Planning for Warsaw (“Study for Warsaw”). approximately 2.25 million, adding about the current future work look like? population of Katowice to its scale. We don’t want the Owing to the pandemic, digital transformation has Marlena Happach Until 2020, almost none of us had experienced a city to sprawl into the suburbs, however. We want it to gained momentum. We have all taken an impromptu Chief Architect of Warsaw pandemic. Practically overnight we had to shift priorities remain compact with revitalised post-industrial locations intensive course in how to work and perform our daily with health and security becoming critical, and reorganise and with optimal use of our river. We also want new chores online and we have discovered that your “office” carried out the amended plan and prevented our lives and work. This has been a tough time for all of infrastructure to be supported by a programme to create is wherever your laptop, smartphone and web connection the construction project from standing still in an us. The municipality, led by President Rafał Trzaskowski, a network of local facilities that are close to residents. is. On the other hand, the pandemic has demonstrated incomplete skeleton form. Everybody was flexible and had to adapt the systems of city life to cope with the new that it’s difficult to work, learn and coexist in crowded now everybody can be proud of the outcome: the P4 challenges. The city needs to be more resistant to climate change flats with poor broadband connections. Therefore, for facility with the hotel won the Architectonic Award elements such as warming, heavy rainfall or drought. some, working traditionally from offices may be more of the President of Warsaw for best commercial We don’t know for sure what the post-pandemic world will Let’s grow greenery among buildings, arrange small convenient, providing faster, wired internet access and investment and illustrated the benefits of policies look like, but we’re sure it will be changed. We’ve heard landscapes around water features and create green higher levels of security. We have found also that some to introduce new facilities in areas dominated by office the concerns of architects and the construction industry: belts that connect recreational areas. Just as with roads people will for various reasons prefer a more modern, buildings. suspended investments and projects, and risks of or underground infrastructure, these must be woven remote alternative to the traditional office. And there bankruptcy. People are anxious about their futures, which into the fabric of the city. Efficient blue and green is a third way where we don’t all have to commute to Local vs. central; single- vs. multi-functional translates into fewer investments in office space. Market infrastructure provides demonstrable benefits that are work on a daily basis but can adopt a hybrid mode, How should Warsaw change to become attractive for saturation is leading to a more cautious approach. reflected in our health, well-being and the growing value working some days remotely and other days in offices those who work, live and spend their free time here? of residential and commercial properties. A consistent, with hotdesking meaning that people may share the same The pandemic has proven that our ideas of what a We need to remember these facts while working on planned system is the only way to preserve biodiversity, desk working on different days. Both during and after people-friendly city should be were right. First of all, the Study for Warsaw and bear in mind that plans and ecosystems, cleaner air and urban regeneration. the pandemic, we need to learn flexibility in planning, it must be polycentric, with services available everywhere documents prepared prior to the pandemic need to be design and schemes to improve work and leisure. within walking or biking distance. Local shops, updated and verified for today’s changed circumstances. We know there are 200,000 to 300,000 more people who pharmacies, green spaces and pocket parks make life use the city but don’t live in it and we must build in this The facility located in Służewiec Przemysłowy, at 4 more pleasant, especially in a time of pandemic. knowledge when working on the Study for Warsaw. There Postępu Street may serve as a good example of this A compact city is better than urban sprawl as it provides is a buffer in our design, but it does not involve making flexibility. Initially designed as an office building, it was more efficient transport, easier product deliveries and our roads wider to let everyone drive to the downtown turned into a hotel when, in the course of construction, local services such as medical care or schools. area and park their vehicles there. Our future transport the investors found out it would not attract a sufficient and mobility systems need to be more sustainable too. number of tenants. The Municipality Office smoothly

23 Warsaw Crane Survey 2021

The advantage of districts offering a variety of functions Gradually, investors are becoming aware that over- Office concentration and de-concentration in Praga Large- and small-scale plans has also been confirmed. Areas where residential concentration works against them. The concept In our planning, Praga is naturally the other half of the city The Study for Warsaw looks at the city from a bird’s-eye buildings are mixed with workplaces, key services, of a residential area located in Służewiec Przemysłowy centre. Thanks to the revitalisation programme (Praga view but also takes a long-term perspective that stretches retail and green public spaces remained alive even is a good example of this mind-shift. It is to be developed Koneser Center) and private investments, it has been to the mid-21st century. We know that both citizens and during the most restrictive phases of the lockdown. by Echo Investment across Domaniewska, Wołoska and changing for the better. In the coming years, the proximity non-resident users of our city expect rapid improvement The opening of large mixed-use commercial facilities, Postępu streets and the agreement with the city provides of the National Stadium and Praski Harbour will turn in the quality of public spaces, especially those adjacent such as Powiśle Power Plant or Warsaw Brewery, took for construction of a school building at Konstruktorska the area into a new centre with the best public transport to their places of residence or work. Therefore, we are place during the pandemic. The former Norblin Plant Street. These changes are being mandated by the market, in Warsaw. The development concept (Stadion City) piloting a number of small initiatives, included in the New has changed and the Jupiter facility at Towarowa Street municipal policy and growing awareness that people don’t for the 30-hectare space is ready and it will occupy Downtown concept by President Rafał Trzaskowski. is awaiting refurbishment. These investments involve want be forced to commute by road. the part of the city between the Warszawa-Stadion The concept focuses on improved safety for all, especially the regeneration of old post-industrial areas, no longer railway station and Aleja Zieleniecka, which offers space pedestrians and cyclists. walled off but integrated within the fabric of the city and The Downtown Belt including Wola, the proximity for office facilities, hotels, exhibition halls, a multi- offering a broad range of services that were previously of the Palace of Culture, Powiśle and the National functional venue and a congress centre. I believe The number of pedestrian crossings has increased while absent. These large development projects include Stadium the new office and service centre on the right bank pocket parks and attractive street furniture will make residential areas with rental options. In my mind’s eye I see a wide, modern downtown belt of the Wisła River will support the downtown area the city a place to enjoy. The effects are plain stretching from Rondo Daszyńskiego and the Palace in its role. in the section of Aleja Jana Pawła II from Rondo Traditionalists change their mind of Culture, all the way through the National Stadium Czterdziestolatka to Rondo ONZ. Today, Marszałkowska We know the office space market is highly traditional located on the right bank of the river and surrounded We are preparing the new Study for Warsaw, which is Street along Plac Defilad is being revitalised. The “Five with investors focusing on a concentration of space that by Stadion City and Praski Harbour. A new bike-and- being developed concurrently with conceptual projects Corner Square” at the crossing of Krucza, Bracka, offers better chances for success. This can be observed pedestrian bridge connecting Karowa Street with Okrzei for large post-industrial areas (Stare Świdry, Żerań FSO, Chmielna, Zgoda and Szpitalna is gaining a new and around Rondo Daszyńskiego and formerly a similar Street will span the riverbanks. This attractive area will Szwedzka), each including an important office and service attractive look, combining the function of a square with process took place in Służewiec Przemysłowy. The Wola see a broad range of services and businesses and won’t component so residents of these areas will be provided that of a nice place to meet. This is a microcosm of the city District area at Rondo Daszyńskiego is well connected lack spaces for cultural and scientific events. Leisure with nearby workplaces. we want to build, based on the Study for Warsaw. Warsaw with the downtown and other parts of the city via the facilities on the riverbank close to the University Library, will become a beautiful, green city, safe, open and proof underground and the network of trams and buses. But Copernicus Science Centre and the Powiśle Power Plant, We believe that small offices should be located on the against climate changes and other threats, safe. It will be Służewiec Przemysłowy remains an island of offices with will be accessible by public transport (underground, right side of the river, close to residential areas and green a great place to live… and a great place to invest in, too. the Chopin Airport nearby and an underdeveloped public trains, trams) and offering a variety of services. No spaces. Office facilities may be located in Praski Harbour, transport network. wonder investors are highly interested in the location. in Stare Świdry (a former construction plant) or in FSO Żerań with multifunctional facilities. They may also isolate residential areas from major road traffic and public transport systems.

24 Warsaw Crane Survey 2021

Methodology

This report measures the volume of modern office COVID-19 influence developments taking place within the administrative The COVID-19 pandemic has not significantly affected borders of Warsaw. To analyse Warsaw’s office stock construction work on Warsaw’s modern office projects. and on-going investment processes, we examined Our research did not reveal any investments that have more than 1,000 properties, including significant been suspended due to the pandemic. In the first office refurbishments. We have collected detailed weeks of lock-down, we observed a short suspension of information about all the buildings, as well as the dates of administrative procedures in the areas of urban planning administrative decisions and permissions, and the dates and construction. After this period, the Polish Ministry when buildings were commissioned. These data were of Development recommended the use of online tools. complemented with information from developers, project Additional regulations were introduced in governmental websites, brochures and other accessible sources. In our ‘Anti-Crisis Shields’, including simplified procedures for report, we publish information on existing and planned reporting investment applications and new regulations modern schemes with a primary or significant function for reporting formal shortcomings. of providing office space. Not included in the survey are multiple other buildings that include office space, such Sources: as small business units, warehouses, retail schemes and • Register of administrative decisions, Warsaw City office spaces located in residential buildings as well as Administration, 2020 Panorama of Warsaw districts in office schemes dedicated to small businesses. During 2018, Statistical Office in Warsaw, our survey we have noticed that some new investments • Mazovian Centre for Regional Surveys, Warsaw, were realised on a basis of replacement building permit. December 2019 We then looked at the administrative decisions of Warsaw City Administration and data from the Statistical Office. • Deloitte analysis

25 Warsaw Crane Survey 2021

Contacts

Dominik Stojek Magdalena Topolska - Ziemak Wojciech Wojtowicz Partner Associate Manager Analyst Real Estate Advisory Real Estate Advisory Real Estate Advisory [email protected] [email protected] [email protected] +48 693 074 973 +48 608 507 700 +48 22 511 03 14

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