Reesco Group believes in the retail sector and is...

POLAND LLP buys portfolio of five Polish warehouse parks

13/05/2021 Comments (0) Views: 1278 Central Europe, Flex Space, Home, Market Data, Office, TriCity Poland, Warsaw

Polish office market – 2021 update

Offices on track – The fact that the office sector is doing well in the pandemic is evidenced by, for example, the level of vacancies, which with regularly increasing supply over the last 12 months, increased in Warsaw only by 4 per cent, and in the main regional markets in the country by about 3.5 per cent.

According to Walter Herz, in the first quarter of 2021, almost 170 thousand sq m. of space was launched on the Warsaw market, which increased the resources of the largest office center in Poland to over 6 million sq m. of space. By the end of 2021, developers plan to complete almost half of the 420 thousand sq m. of offices in Warsaw that are being built in the city.

In regions, where a total number of office buildings is close to the size of Warsaw stock, in the first quarter of 2021, over 46 thousand sq m. of space was completed. The average number of vacant offices in the largest regional cities in the country is around 1.5 per cent larger than in Warsaw.

A similar volume of lease in the regions and in Warsaw

– This year, the decline in demand for offices is more evident. In the first three months of this year, the total lease volume on regional markets was comparable to the number of offices leased in Warsaw. The offices in the Tri-City were the most popular in the regions, informs Mateusz Strzelecki, Partner / Head of Regional Markets at Walter Herz. – On the other hand, the amount of office space under construction has dropped dramatically, especially on the Warsaw market. Nowadays, there is the fewest constructions in the capital in at least ten years. After a short break from the introduction of the restrictions, developers have started new projects, the construction of which they had previously planned, but this does not mean that the boom we observed in the office sector before the pandemic continues – adds Mateusz Strzelecki.

A very visible tendency, characteristic of the entire market, is certainly the interest of tenants in the best facilities located in the city centers. Companies are giving up offices in older, lower-class buildings. However, they decide to buy space in the best office buildings with the most attractive locations

Mateusz Strzelecki – Partner / Head of Regional Markets Walter Herz

Therefore, new office developments in central locations should be expected to line with the reported demand. Office buildings that will offer the best parameters in terms of comfort and safety at work. And at the same time, a partial suspension of plans related to the construction of office buildings in less attractive city areas.

Flexibility, flexibility and flexibility again

The office market is waiting for restrictions to be lifted. Most of the employees in various companies declare their willingness to return to work in the office. People lack direct contacts. If the restrictions hampering the normal functioning of the business are lifted, the pace of return to offices will certainly increase. After more than a year of the pandemic, we are sure that stationary offices will remain the foundation of operations for the organization, because building interpersonal relationships is the core of effective cooperation. However, these will be other offices adapted to the new reality.

First of all, the work space will have to meet the current sanitary requirements. In addition, offices will be more flexible to cope with the hybrid work system in the rotational division into home office and work in the office, which most companies have already considered the most functional in the new conditions. Therefore, solutions are now being implemented to facilitate the booking of desks and enable ongoing monitoring of presence in the office and constant control of the safety level.

Mateusz Strzelecki admits that tenants expect more flexible solutions, both in terms of office space and terms of agreements.

Companies are looking for space that allows for quick changes in individual work zones. In addition, they also want to secure access to flexible solutions, such as co-working spaces, which they could use should it be necessary

Mateusz Strzelecki

Incentive packages for tenants

Strzelecki admits that there have been no significant reductions in rental rates in the main office markets, especially when it comes to the best facilities. However, due to the broad incentive package offered to tenants, effective rates can be as much as 20 per cent lower than the starting prices.

Facilities that ensure safety and well-being in the workplace are the most valued on the market. Such office buildings implement, among others, remote access control systems, or solutions and applications that allow to manage elevators, air conditioning, ventilation, lighting, and book parking and conference rooms using smartphones.

Properties that guarantee comfort to employees are very popular. Comfort is provided by, among others, extensive service facilities available on site. And this is what the latest mixed-use complexes are like. In addition to offices, they also offer conference and hotel functions, often also residential, and provide a wide range of retail and services.

About Walter Herz

Walter Herz company is a leading Polish entity which has been operating in the commercial real estate sector across the country. For nine years, the company has been providing comprehensive and strategic investment consulting services for tenants, investors and real estate owners. It provides extensive support for both public and private sector. Walter Herz experts assist clients in finding and leasing space, and give advice when it comes to investment and hotel projects.

In addition to its headquarters in Warsaw, the company operates in Krakow and the Tri-City. Walter Herz has created Tenant Academy, first project in the country, supporting and educating commercial real estate tenants across Poland, with on-site courses held in the largest cities in the country. In order to ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice.

Leave a Reply

Your email address will not be published. Required fields are marked *