JLL published findings of its newest report „Poland: Office for modern business services”. The research paper examines the development opportunities in Poland for modern business services sector, especially in the field of access to high quality office space. The dynamic growth of the sector translates into the industry’s demand for office space.
„In the last several years, Poland has become the leader in terms of employment in the modern business services sector in Central and Eastern Europe (CEE) and an important spot on the global offshoring map. At the beginning of 2014 the industry employed approximately 128 000 people and this is more than total employment in the coal mining industry which, until recently, has been one of the leading branches of economy in Poland. This proves that Poland is moving more towards service industry” – can be read in the report.
Anna Bartoszewicz-Wnuk, Head of Research and Consultancy, JLL, commented: “Poland’s office market is one of the most dynamic and quickly developing markets in Europe. With 7,1 million sq. meters of modern office stock, it is also the largest in the entire Central and Eastern Europe region. Crucially, Poland offers a wide range of office locations for potential tenants, from Warsaw and the other major cities of Kraków, Wrocław, Tri-City, Katowice, Poznań, Łódź, Szczecin and Lublin, to smaller office markets. No other country in Central and Eastern Europe is able to offer so many potential locations to the business services sector which seeks flexibility and efficiency of office space and security of operations”.
Currently, Poland has 3,4% of all global outsourcing/offshoring jobs, ranking 1st in CEE, 2nd in Europe and 6th globally.
More than 10 000 people are hired in foreign business centers in the Katowice agglomeration in total, ABSL stated earlier this year. Since the beginning of 2012, employment in the sector increased by approximately 40% in Katowice and the number of centers exceeded 40 in 2014.
Poland offers wide range of office locations for potential business centers tenants, beginning with Warsaw and followed by other regional cities including Katowice. There is, however, no common picture for the major office markets in Poland. Kraków and Katowice for instance, currently have the lowest level of immediate vacant space but a relatively high volume of projects under construction (vacancy rate: 4,5% and 7,5%; space under construction: 136 500 sq. meters and 54 300 sq. meters respectively), JLL experts claim. For example, in Szczecin, an extensive construction activity during 2011 and 2012 has led to oversupply with vacancy rate over 20% since H2 2013.
“The high level of construction activity indicates that more quality space will come onto the market in the short to medium term. Importantly, both international and domestic developers are well aware of the specific space requirements that the modern business services sector demands. Most office buildings in Poland meet A-Class standard and offer flexible layouts and effective floor plans meaning expansion or internal re-arrangement can be performed efficiently. This makes the expansion or reorganization of an office more convenient and easier for tenants, minimizing the impact on the company’s current operations” – said Jakub Sylwestrowicz, Head of Tenant Representation, JLL.
There were 60 700 sq. meters of office space leased in Katowice in 2013. It was the third highest volume of transactions amongst regional cities last year – more office spaces were leased only in Kraków and Wrocław. The Katowice total modern office space amounts to approximately 325 000 sq. meters. At present, tenants can choose from 14 different options of 1 000 sq. meters available until the end of 2014. Headline rents for prime quality buildings in established office markets range between EUR 12,5 and EUR 13,75 per one square meter per month.