Office market 1991 – 2011

A synopsis of office real estate market, current trends and anticipated changes.

An international advising company on the commercial real estate market, Cushman & Wakefield, this year has its 20th anniversary of starting activities in Poland. On the occasion, company's experts have prepared a synopsis of office real estate market in recent time. They have also presented current trends and anticipated changes.

90's

The beginning of Polish modern commercial space market dated back to the 90's, the time of important political system and economy transformation. The development of free market economy has caused investors' interest in the market. At the beginning of the 90's. they had to choose from only a few modern office buildings, for example Intraco (build in the 70's), building of Elektrim or Błękitny Wieżowiec.

Rent in such buildings as Intraco amounted to staggering 54 USD for one square metre. Typical offices were located mainly in administrative buildings or tenement houses. The offices were small rooms on the both sides of a long corridor. A representative function was performed by CEO's office – says Paulina Misiak, Partner at Office Department of Cushman & Wakefield.

Warsaw was slowly becoming one big construction site. During the first decade of economic transformation these office buildings were opened for use (order of the finishing date): Kolmex, Warsaw Corporate Center, IPC Business Center, Aktyn Business Center, Fim Tower (now Orco Tower), buildings of the Atrium complex, Prima Court, Ilmet, Alma, Holland Park, Kaskada, Nautilus, Norway House, Sienna Center, Warsaw Financial Center, BTA Office Center, Wolf Zielna, Puławska Financial Center, Millennium Plaza, Saski Point, Warsaw Towers and Warsaw Trade Tower.

Current situation

According to "European Cities Monitor", Warsaw is in the lead of European cities, which are considered by the investors as attractive localisations for further company expansion. The capital is in a good position in the ranking because of the small costs of employment, small costs and high availability of office space and business-friendly climate, created by the government.

Currently the supply of modern office space in Warsaw is 1,400% bigger than in 1991, from 250 thousand to 3.5 million m2. Warsaw can boast of over 375 modern office buildings. Office spaces, finished in the lat 10 years, are among the most modern ones in Europe when considering their standard and technical solutions. Such buildings as Rondo 1 and Metropolitan can be the examples. Small offices and neverending corridors were replaced with open spaces, and the company's showcase is not the CEO's office, but the reception – says Paulina Misiak.

The market presents many different possibilities of space arrangement, and rents are almost two times cheaper than before. Asking rents in the best centre localisations are 24-27 Euro/m2/a month, and outside the centre 15.5-16.5 Euro. A distinct trend on the market is the development of business parks, which are attractive because of lower lease prices and the possibility of tenants' expansion. Warsaw is still main office market of the country. Among the regional cities, the biggest amount of office space (1,913,000 m2 in total) are in Kraków, Wrocław, Tricity, Katowice, Poznań and Łódź. Asking rents in these cities are between 12 and 16 Euro/m2/a month.

Forecasts

Along with the technological progress and the development of mobile technology, there will be a change in employers' stance when considering work environment. Working from home or other places will rise in popularity. The offices will still be places of meetings, presentations, and so-called peaceful work.

Green concepts and ecological initiatives will be an important factor for the tenants who take care of their employees' comfort. There will be a development of regional cities, with Łódź in the lead – anticipates Paulina Misiak.


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