The analysis of the new supply in the office market in Warsaw shows, as expected, after the office hub in Służewiec, a new location with total office stock exceeding one million sqm is the area around Rondo Daszyńskiego. Among the current office locations, Warsaw West Station may unexpectedly gain popularity in the coming years. What is behind this? AXI IMMO office agency decided to analyze it.
Warsaw is entering the next stage of rebuilding its road and rail infrastructure. The city wants to be more mobile and allow more comfortable access, not only from it each district but also from other cities, several dozen kilometres away, considered as Ursynów and Białołęka as the so-called Warsaw sleeping bedrooms. The project enabling much easier transport is the reconstruction of the cross-city line route, which has been planned for years. The first stage of the modernization is announced for the years 2020-2023 the reconstruction of the Warsaw West Railway Station. Despite its age and renovations, is one of the main transport hubs for about 1,000 different railway connections daily, i.e. agglomeration, regional, national and international long-distance.
As an additional project during the reconstruction of the West Railway Station, the Warsaw authorities are planning a tram line that will connect Wilanów with Odolany. The main transfer station will be located just below the railway station. This way, the vicinity of Warsaw West Railway Station will create a huge modern transport hub, which, with the office space already available in this area, may interest some companies to change their address.
„Considering an optimistic scenario, in which the contractor will manage to rebuild the station and implement the project to lay the tracks, build infrastructure and launch a tram route, the vicinity of West Railway Station will offer attractive conditions for tenants in the next few years. This location would be a convenient alternative for companies that want, on the one hand, to be close to the city center and, on the other hand, do not want to pay a high rent,” says Bartosz Oleksak, Negotiator, Office Agnecy, AXI IMMO.
“Today, the office buildings located here, such as West Station, Brama Zachodnia (West Gate) or Eurocentrum, are an option for tenants with a lease expiration date in 3 years. With a high probability, as a result of the improvements in transport, we are predicting that one of the trends will be an increase in the base rental rates. However, still compared to the vicinity of Wola or CBD, it will be possible to save a few EUR per sq m, which could be spent, hopefully in a post-pandemic time, for a much more attractive fit-out space,” adds Bartosz Oleksak.
Due to the quite unpredictable future caused by the Covid-19 pandemic, further office investments throughout Warsaw are being brought into question. In addition, a new offer in the form of sublets has appeared on the market. The option seems to be a bit discouraging and temporarily suspend developers’ plans to implement further projects. The situation is similar in the context of new supply in the vicinity of West Railway Station. Today it is difficult to find new office buildings in this part of Warsaw. The challenge for developers is the relatively limited amount of land for new investments.
Will the future of this location change in the next three years, when the Covid-19 vaccine will be invented, and the transport infrastructure will be improved? In the case of the positive variant, the natural direction for development seems to be the areas located in the administrative part of Wola from Tunelowa street, because most of the buildings from the Ochota side are residential buildings. The possible office development would involve the transformation and purchase of the current commercial buildings for other purposes, such as the replacement of the Mercure F. Chopin hotel with the Q22 office building, known from the past.
„The current owners of office buildings located in the vicinity of West Railway Station received the news about the modernization of this communication hub with great optimism. Additional investment in communication infrastructure is associated with a much better valuation of their real estate. Analyzing the potential of this location, we found that while the immediate vicinity of West Railway Station will gain in importance, the redevelopment should not affect the interest in office buildings located behind the Blue City and Atrium Reduta shopping centers,” adds Martin Lipiński, Head of Office Agency and Tenant Representation, AXI IMMO.