COVID-19: State of the Occupier Update - Warsaw

Most organizations have been working from home for the past two weeks.

The exchange rate volatility on the Euro has hurt some occupiers, but there is little we can do to help them. Occupiers have been seeking short-term lease extensions, asking for more free rent than fit-out concessions on new leases, looking for ways to improve their current cash flow (including through renegotiating leases), and seeking to delay rent payments. They’ve also asked us to include pandemics in the force majeure definition for new leases.

OCCUPIERS?

Most occupiers are seeking to renew in place. There is more interest in short-term serviced office leases. Many are looking to reduce their space through subleases.


LANDLORDS?

Landlords cannot currently guarantee fit-out costs and schedules due to uncertainty from the pandemic.


DEVELOPERS / INVESTORS?

Developers will most likely freeze several developments. They are worried about facing penalties for late delivery due to construction material and labor shortages.

Some occupiers may have the option to accelerate renegotiations and receive incentives earlier, including free rent and landlord-paid fit-outs. They may also be able to receive renewal options that are shorter than the typical five years and/or additional break options. Longer term, tenants will learn from the work-from-home model and may be able to reduce space needs going forward.

Contact us.