Polish commercial brokerage Walter Herz Managing Partner Bartłomiej Zagrodnik sits down with REnews for a few questions ahead of our virtual round table Office Recovery 2021.
Brokerage is moving towards increasing specialization across Europe. How challenging was it to establish your agency exclusively focusing on commercial assets?
When we founded the agency, the commercial real estate market in Poland was completely different, much smaller than it is now. Many office and warehouse centers in the region were practically non-existent 10 years ago. Over the last decade, the value of investments in the warehouse market has increased almost tenfold, the amount of commercial space has doubled, and the amount of modern office space in Polish regional cities has almost tripled. There have been huge changes in every sector. The market is now mature and the investment products are hard to beat when compared to Western European countries. Our company grew alongside the market. Today, we are a leading Polish agency, providing comprehensive services to all market participants in all commercial sectors – tenants, developers, real estate owners, investors and state administration institutions. What distinguishes us is the implementation of global standards from the very beginning, thorough knowledge and comprehensive preparation, as well as excellent recognition of Polish market reality and an uncompromising approach to the quality of customer service.
You share markets with the giant Anglo-American brokerages. How is Walter Herz able to thrive? Do you have a niche product?
From the beginning our advantage is providing fully professional and often non-standard solutions, individually tailored to the challenges faced by our clients. We maximize their profits, while minimizing the risk. It is possible due to the unconventional approach of our team to the process, based on extensive experience and information about the current market situation. Last year, for example, right at the beginning of the pandemic, we immediately switched our consulting provided under our own Tenant’s Academy to an on-line meeting system, gathering over 4 000 participants taking part in these training sessions. At this extremely difficult moment of the first lockdown, we answered questions, advised and looked for solutions together. A few months later, we organized an international webinar aimed at investors looking for business and investment opportunities in Poland. We don’t feel pressure from the network agencies. The comprehensiveness of services provided and the scope of activities carried out in many cases puts us on an equal footing with other big market players. Of course, we can’t compete in corporate transactions, but when it comes to other tasks, more and more often we win with the quality of service, commitment and unconventional approach, as well as exceptionally well optimized solutions.
REnews has a new event coming up! Don’t forget to sign up for Office Recovery 2021. Log in to hear an exciting round table discussion about the future of the workspace in a post pandemic era. Come hear Bartłomiej Zagrodnik Managing Partner at Walter Herz speak about the the challenges office space leasing is facing at a critical time for the industry.
The pandemic has been a major challenge for the real estate sector and the industry is searching for the best way forward in an environment where nobody knows exactly where we are heading. One major upheaval has been the workspace. With multiple lockdowns and working remotely, the central role the physical office has always played in a company’s strategy and budget must be reassessed. Do we still need offices – and if so what kind of offices? Is working from home really just as effective? REnews is pleased to invite you to Office Recovery 2021, a round table discussion by industry experts on the latest in the office sector recovery process.
Wednesday, September 22, 2021
Online – Zoom
Sign up for Office Recovery here
How has the pandemic affected the leasing of office space?
The office market will no longer be the way it was before the pandemic. The increasingly popular model of hybrid work and its flexible way of organizing it, have become a permanent feature of our lives and a sustainable way of companies functioning. Nevertheless, after several months of market changes, when we could also hear the hypotheses proposing the end of in office work, there comes the time for verification. Companies haven’t decided to give up the occupied space, because home office has not turned out to be such a perfect solution. This is evidenced by KPI analysis, goals set by the companies, business results and visible anomalies in the functioning of many organizations. As a result, more and more management boards of companies notice the problems generated by remote work, manifested in a decline in the company’s results, work efficiency, as well as poor employee motivation and lack of ties with the company. As a consequence of the changes caused by the pandemic in the business world, we have reached the point where there was a need to redefine the work environment, the need to choose a new operating strategy for the companies and implement it in the organizations. As consultants, we can clearly see that the companies increasingly understand that there is no one-size-fits-all type of work environment that will work everywhere. In each company, after drawing conclusions from the analysis, it is necessary to apply the most appropriate solution for that company. Recent polls show that the vast majority of companies want to return to in office work, and the companies that are going to open their offices the fastest are those with the hybrid work model already in place. Although remote work will stay with us permanently, it certainly will not completely replace working from the office. This is also indicated by the expectations of employees, most of whom would like to spend some time a week in the office.
How is the boom in logistics and related e-commerce affecting Poland? How much of that is due to your proximity to the German market?
Boom in logistics on the Polish market is absolutely phenomenal. We are dealing with a record high new supply, but also even greater demand for warehouse space. I mean both, the interest of tenants as well as investors looking for assets in this segment. The following quarters will bring further growth and dynamic development of the logistics and warehouse market in Poland. The constantly growing e-commerce sector and the related boom in the last mile logistics encourage companies and developers to invest in warehouses in regional markets, and now also in smaller urban centers. Warehouses remain on trend, which in 2020 brought this sector the best result in the history of the investment market in Poland. We could observe a continuation of this trend also in the first half of 2021, when the volume of investment transactions was basically divided between the warehouse and office sectors. The growing attractiveness of warehouses as investment assets forces developers to intensify their efforts. Supply in the warehouse segment is growing rapidly. A record amount of 3.4 million sq m. of warehouse space is currently under construction in Poland.
How do you see technology affect commercial real estate and what do both owners and end users expect?
Prop-tech is undoubtedly the future of the growing commercial real estate market. Last year was a breakthrough in terms of the pace of popularization of these solutions in the field of digitization of business processes. The pandemic has significantly accelerated the adaptation of new technologies in the real estate sector and their application in everyday work. It has become obvious for both property owners and tenants that modern buildings must be equipped with a number of systems for sanitary safety, comfort and flexibility of work.
Real estate analysis, optimization of the work environment, improvement of facility management are just a few areas where the currently used technological solutions are gaining importance and implement an increasing scope of activities. Undoubtedly, in the era of pandemic, we have clearly learned how important professional IT systems are and how many benefits are being brought by cloud solutions.
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 Cracow 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.
Bartłomiej Zagrodnik Brokerage CEE Leasing Poland State of the Market Walter Herz