Savills: a new dimension of Służewiec

According to “Spotlight: Służewiec 2023”, Służewiec has seen significant improvements to its transport infrastructure in recent years. The largest infrastructure project was the construction of a grade-separated flyover for through traffic in Postępu Street over Marynarska Street. Other milestones in the development of the district’s transport infrastructure were completed in the north-western part of Służewiec. Road traffic also improved significantly with the extension of Woronicza Street to Żwirki i Wigury Street, coupled with the construction of a new roundabout, while the extension of Suwak Street to Woronicza Street has facilitated traffic flow between the Mokotów and Ochota districts.

Jakub Gładysz from the Lepszy Służewiec Association says that green areas and public spaces are undergoing a revolution: “The once neglected green area near the junction of Marynarska and Wołoska streets has turned into a new square that is popular with local residents and office workers alike. The planned linear park project, which already has funding secured and is only awaiting a building permit, will see construction of a stretch along railway tracks, two stretches on disused sidings and another section from that new square along Wołoska Street. The linear park will enable easier and faster access to other parts of Służewiec.”

“Office buildings which Służewiec has been known for in recent years are also going through a metamorphosis. The first modern office building in Służewiec was built over 30 years ago. Pre-2010 buildings currently account for about half of the district’s office stock. Their owners are, however, taking measures to adapt them to today’s sustainability and employee wellbeing requirements. As office availability continues to shrink in central Warsaw, Służewiec is likely to be the only alternative in the near future for large tenants looking to cut costs through office relocation,” says Daniel Czarnecki, Head of Office Agency, Landlord Representation, Savills.

According to Savills, recently upgraded office buildings include Tulipan House, Signum Work Station and Innova Work Station, Marynarska Point II, HOL 7.7, while Marynarska Business Park and Marynarska Point I are currently being refurbished.

Savills also notes a significant slowdown in office construction activity in Służewiec, with just under 120,000 sq m of new office space coming on stream since the beginning of 2016. Developers have, however, secured several locations for new office projects. The development pipeline includes the refurbishment of Antares and the construction of Adgar Poland’s new office building in Marynarska Street on its recently acquired plot of land.

According to Savills data, Służewiec’s total prime office stock comprises 76 buildings with a combined area of more than one million sq m, including over 23,500 sq m of flexible coworking space and serviced offices. Subdued occupier demand for offices in non-central locations in recent years is also seen in Służewiec, where unoccupied space accounts for close to a quarter of its office stock. Vacant space amounts to almost 230,000 sq m, or 30% of all available office space across Warsaw.

Over 1.16 million sq m of office space has been leased in Służewiec for the last seven years, making this district the top non-central office destination. This volume accounts for 39% of Warsaw’s overall office take-up. Rental rates in Służewiec range between EUR 13.00–15.00/sq m/month, while some Class B office buildings command rents starting from EUR 8.00/sq m/month.

“This data confirms that Warsaw still needs Służewiec, one of the oldest business districts in the city, and companies present there have been renewing their leases over all these years. A notable trend is the complete or partial repurposing of older office buildings that have lost some of their appeal for potential tenants for residential or service use including F&B, medical and educational premises. Looking ahead, we are likely to see property repurposing gain momentum, for example through redevelopment or demolition and construction of new better suited buildings,” comments Wioleta Wojtczak, Head of Research, Savills.

Służewiec is, however, much more than just offices, say the report’s authors. According to Hotel Professionals, Służewiec has five hotels with a total of around 920 rooms. All the hotels in this part of Warsaw were opened post-2018.

The residential market, including the Private Rented Sector, is also growing in Służewiec. According to data from the REDNET Property Group, the district’s residential pipeline comprises 13 new projects. Służewiec also has over 1,400 PRS flats, accounting for over 25% of Warsaw’s total PRS stock, says Savills. Additionally, this sector’s growth is expected to be further driven by the repurposing of older office buildings.

“The evolution, which began several years ago, has transformed and continues to transform the monofunctional office district of Służewiec into a prime mixed-use area with new green spaces and plans for new Fast Municipal Railway (SKM) connections. In addition, more mixed-use projects are also expected to break ground. Some properties are likely to be repurposed in the coming years through major redevelopments,” says Daniel Czarnecki, Savills.

Download Spotlight: Służewiec 2023 report