The “Business Services Sector in Poland 2015” report was presented at the 6th ABSL conference. It was prepared by ABSL in cooperation with Antal International, Baker & McKenzie, Everest Group and JLL – the company which provided data from the office market. According to the report, business services centers with foreign capital employ more than 150,000 professionals.
If it were not for the business services sector, office markets outside Warsaw would currently be at a different level of development. Poland has a leading position in CEE in terms of modern office stock, with more than 7.5 million sq m on offer at the beginning of 2015, which is, to certain degree, due to this strategic sector.
Developed office market – a magnet for investors
Currently, there is approximately 1.4 million sq m of office space under construction, of which 50% is located in Warsaw (755,000 sq m, including refurbishments and extensions of existing buildings). In terms of regional cities, the most dynamic markets are Wrocław, Kraków and the Tri-City, where 178,000 sq m, 157,000 sq m and 140,000 sq m of office space, respectively, are in various stages of development. This construction activity translates into increased office space availability, creating favourable market conditions for tenants.
Anna Młyniec, Head of Office Agency and Tenant Representation at JLL, says: “What makes Poland so unique among all the CEE countries is the large number of urban hubs, such as Warsaw, Kraków, Wrocław, Tri-City, Katowice, Poznań, Łódź, Szczecin or Lublin. Smaller cities offering well-developed infrastructure and a trained workforce are also on the business services sector’s radar. A diversified range of properties on offer is certainly Poland’s significant asset.“
Demand for office space
2014 was a record breaking year for the Polish office market with total demand hitting the 1 million sq m mark. The total demand in Q1 2015 was also promising – 300,000 sq m, of which 132,000 sq m outside Warsaw.
“In the last few years, demand in the main Polish agglomerations has been growing steadily. This increase is due to the influx of new business services companies and to those already operating in Poland. The volume of occupied office space has also been growing along with new investments and an increase in employment rate”, explains Mateusz Polkowski, Associate Director, Research and Consulting at JLL.
In Q1 2015 in Kraków, the largest office market outside Warsaw, the vacancy rate stood at 6.2%. The situation was different in Poznań, where the vacancy rate is the highest in Poland (approximately 23%). On other largest regional markets, the vacancy rates range between 7.9% (in Łódź) to 14.1% (in Szczecin).
“It is worth noting that companies looking for office space to rent and considering a certain city, should take into account not only the vacancy rate, but more importantly the number of options available to lease office space in existing buildings and those under construction. From the perspective of a single company searching for a particularly large office, the vacancy rate often does not reflect the situation on the market,” explains Anna Młyniec.
“Potential tenants looking for office space in Poland have a wide range of choice in terms of both technical standards and rents. Rental prices for the best office spaces in Poland, meeting the requirements of the modern business services sector and located in the largest cities, including non-central major office hubs in Warsaw, are between €11 and €15 / sq m /month. Rents are lower on ‘up and coming’ markets, such as Rzeszów, Olsztyn, Opole, Bydgoszcz, Toruń or Kielce – €8 – €12 per sq m a month”, summarizes Anna Młyniec.