As the demand for office space in Warsaw is increasing (15.8% y/y in 2005) outpacing the availability of quality office space is not keeping the pace, in particularly in Warsaw, which meant that vacancies decreased to 8.16% in 2005 from 11.8% in 2004. According to Cushman&Wakefield, the Polish office space is stabilizing.
Our view: the trend of stabilizing office market in Poland have been confirmed to us from various source earlier on with signs of rent increases. This is certainly positive for both GTC and Orco, in particular to GTC as it has a larger exposure to Polish office rental market as the yields continue to fall while rents are on the rise increasing market values of the properties.