For the office market, 2011 was a good year.In Krakow, which is a leader in the office market, the number of leased space was record - more than 70 thousand. sq mWhat was the last year, is the crisis still being felt, and if so, how property managers are dealing with it? Monika Sułdecka-Karas, Regional Director of Knight Frank Sp z o.o. gave us the answers for the questions concerning the situation in the office market.
ECO It was a good year
Monika Sułdecka-Karas, Regional Director of Knight Frank Sp z o.o. talks about the situation in the office market in 2011.
In which phase is the Krakow office market after 2011?
Definitely in the growth phase. Given the amount of leased office space, we can talk about local success in two ways. Firstly, because in Krakow, leased space is more than 70 thousand. square meters, which is a record compared to previous years. Secondly - we should add around 30 thousand. square meters of the renegotiated lease agreements, which means that a large number of companies are not derived from Krakow, but they extend the lease.
What was the situation between tenant and developer last year? Are we dealing with a market of developer, or rather market of tenant?
Today there is no clear answer. In the past two years, this was the market of tenants. Now, in some buildings, the situation is satisfactory enough for the owners that they can decide to whom and for how much will they rent. However, this does not mean that there is no negotiation. Overall, the situation has changed, even tough the vacancy rate declined by only 2 percentage points.
Referring to the previous question, the report indicates that the vacancy rate decreased.Does this mean that, compared to 2010,the demand for office space in Krakow increased?
Demand has increased dramatically. This follows the fact of withholding certain decisions in 2009-2010. To sum up 2011, we saw the growth of new leases by 11 percent. (Compared to 2010).
The crisis - more often pronounced word by participants of the office market. How are the managers of office buildings handling this?
Our managers are the ones who were the first to come into contact with some of the problems of tenants (eg, delays in payments by momentary troubles). This is not a mass phenomenon due to the fact that the time of crisis is past for them. Depending on your behavior and relationships, each problem is solvable.Definitely, however, the principles on which the parties agreed to in the lease agreement must be respected. Thus, problem solving is not painless.
Could crisis lead to "stagnation" of the market, as it happened in 2009?
In 2011, many new companies came to Krakow. For the city and the labor market it is definitely good news, because the demand is not generated solely by the existing firms (please note the company CAPITA and Heineken, which leased the new space). Among those who decided to stay and increase the number of employees is for example SABRE , recently awarded as the best employer of the year. It is good to hear about such employers. However, responding directly to the question: I do not notice any stagnation in general. Individual building owners have worse and
better years. 2011 was a good year for the owners of the building Vinci or Bonarka (B4B). "Grupa Buma" handles it well as always.
We talk a lot about a strong impact of the building on the environment. Is the eco office just a fashion, or a chance to attract tenants?
Both. Since food can be eco, office can be eco as well. I am glad such trend, which on the one hand, it is a fashion, but on the other hand, if you want it to be in line with the environmental policy, I'm in favor. Expecially that the awareness of the tenants is growing. Companies looking for space to rent more often pay attention to modern technology, which not only allow you to function in harmony with nature, but also reduce costs associated with the use of the building.
Can we already talk about the experience in this subject. Was Knight Frank working on the commercialization of green office?
I would not say it was a special experience, however, we are cognizant in this topic.
Are there any differences in the commercialization of green building?
The difference appears in the submission of the marketing project and show savings for tenants. In addition, in some tenants cases, there is a requirement associated with the company's policy, which is focuses on different environmental solutions.
How environmental friendliness is reflected in the increase in value of the property?
Our market is still too young and did not show, how may it have an impact on the value of the property. For now, for this reason you do not see any movement in rents or in rates of capitalization. It is difficult to clearly transform the environmental performance on the value of the property.
Thank you for your time.