Take-up in Warsaw's office market totalled 320,000 m2 in the first half of 2001, 46% higher than the same period last year, according to a new report released by Savills.

Take up outside the central business district (CBD) accounted for the largest portion, and came to more than 270,000 m2.

The report by the international real estate advisor indicates that average vacancy rates in Warsaw have dipped to 6.2% from 8% over the past 12 months. But the most visible decline is seen in non central locations where vacancy rates are lower than CBD at 5.2%. Within these markets, 42% of contracts signed were new leases compared to 30% in the CBD.

Brian Burgess, managing director of Savills Poland: 'High take-up and limited new supply led to a significant decrease in the average vacancy rate over the last 12 months. This, however, is visible mainly in non-central locations. The share of renewals and renegotiations is still high within the city centre, in particular in its core.'

Savills report suggests that aside from new leases, lease renewals and renegotiations are a key driver in the office market accounting for 39% in CBD and 23% in non-CBD areas. However, of greater interest perhaps were the pre-let figures which represented 19% and 29% of CBD and non CBD markets respectively. One deal alone saw TP sign a 43,700 m2 lease sign in the South Western Zone.

In terms of rents, non-CBD locations generated averages of EUR 15-16 m2/month compared to CBD at EUR 25-28 m2/month. Concessions offered by landlords can see effective rents at 10% below quoting price.