Glut in Poland’s Commercial Property Market
- New Europe Investor
- December 02, 2014
Developers in Poland’s Commercial Property Market are continuing to build, despite supply significantly outstripping demand.
The market in the country has experienced a large increase in new office space leading to a vacancy rate currently standing at 14%.
Current office stock in Poland’s capital Warsaw is 4.4 million square metres. 660,000 of this is vacant.
Los Angeles based consultancy CB Richard Ellis Inc. said in a report that Warsaw trails only London, Paris and Moscow for new office development.
The glut in office space has companies such as Mennica Polska SA, a Warsaw property company, turning its focus to residential projects instead.
Poland is the only economy in the EU to avoid recession since the financial crisis but had experienced its own property bubble previously .
Prices in all of the major cities such as Wroclaw, Gdansk, Poznan, Krakow and Warsaw have been sliding since 2008.
The problem of the glut in office space and the continuous addition of projects had the Polish Central Bank making comments about ‘growing imbalances’ facing the market.
Some have suggested that the large volume of office construction suggests a mark up of confidence in the economy.
Growth is currently running well over 3%, and despite there being a deflationary problem, all indicators suggest impressive growth for 2015.