Tri-City office space market

An economic situation of Poland is relatively strong in comparison to other EU countries. Polish economy has suff ered a lot less and got regenerated faster that most, if not all countries of the European Union. ¡ e investors appreciated stability and the potential of Polish economy, which resulted in its high positions in the rankings of the best place for investing. ¡ e latest research of AT Kearney (2010 AT Kearney Foreign Direct Investment Confi dence Index) shows, that since the last report from 2007, we made up for 16 positions – it is the biggest promotion among 25 the most attractive countries in the world. ¡ ere were only 5 countries before Poland China, USA, India, Brazil and Germany.

Despite all these optimistic information, in the beginning of last year the offi ce property market noted a signifi cant decrease in demand and an increase in the factor of free space. Lets remember, that it is the time, when investors are short on the resources for new investments. Half of people analysed by AT Kearney signalize, that they cannot keep investing abroad, because they do not have the access to the capital. ¡ e restriction of infl ow of foreign investments may cause a further decrease in demand for the offi ce space, mainly in regional cities, where most of the BPO/SSC investments are located.
Until now, Cracow and Wrocław seemed to be the most attractive for strategic investments in this sector. Now, Gdansk becomes the best alternative location in Poland. It is shown by independent national ranking prepared in 2009 by KPMG consulting company Exploring Global Frontiers ¡ e New Emerging Destinations).
After the traditional places of concentration of outsourcing investments get saturated, the corporations of IT sector search for alternatives of location development. KPMG indicated 31 such locations in all continents. Among the selected were the metropolitan areas from highly developed countries, as well as the countries from the countries of the rising markets. Next to Buenos Aires, Santiago, Belfast, Belgrade of Sofi a in the ranking as the only city in Poland Gdansk was indicated. Of course, a local offi ce market is not limited just to this city. Gdansk Metropolitan Area presents a valuable potential for an investor.
When it comes to the dimension of modern offi ce spaces, according to Cushman & Wakefi eld, Tri- City comes third among the regional cities in Poland. In comparison to the other cities, it is characterised by a large stability. ¡ e Tri-City market is currently estimated at more than 300 000 square metres of modern offi ce space. ¡ e high demand among the foreign clients gave an impulse for creating new business parks. Among the biggest and most modern complexes of this type in Gdansk Metropolitan Area one should mention Arkonska Business Park built by Torus Company and Łuzycka Offi ce Park realised by Allcon. In the fi rst of them there are offi ces of such investors as: BPH, IBM and First Data. In the other one there are headquarters of companies like Sony Pictures Entertainment, Geoban or Nordea. ¡ e largest offi ce parks shall soon be joined by Garnizon Business Space the project of Hossa Investment Group which shall off er more than 150 000 square metres of offi ce space. In the fi rst stage of this project Hossa has already revitalised the historical complex of former military barracks, where among others the American concern called Acxiom has its abode. ¡ e TPS Otwarta Przestrzen has equally ambitious plans, because it plans on commencing the fi rst stage of Olivia Business Centre in the beginning of 2011. It is a business park, which shall off er the fl oor area of approximately 120 000 square metres. ¡ e expanding offer in the offi ce market in Tri-City has an influence on the increase in interest from the side from the next investors.
InvestGDA Company, which is responsible for attracting foreign investors to Tri-City, today operates 10 clients from BPO sector, who want to locate their service centres in Tri-City. Mainly they are the Scandinavian investors; their requirements for the offi ce space amount to approx. 15 000-20 000 square metres. It has already been the start of the year, so one should expect, that the fi nal requirement of this sector for the offi ce space would be higher. It enables the stable development of already functioning offi ce parks and the construction of the new ones. ¡ e optimistic feelings of local developers, who dominated the Tri-City offi ce market, are refl ected in the factor of non-leased space, which was the lowest in Poland in the beginning of the last year and was approx. 1,6 %. Currently, according to Jones Lang LaSalle, it increased to 7,8 %. It is an attractive factor for both the tenants and the developers.
Most of the office buildings built today in Gdansk have class A and B+ standard. ¡ e buildings are equipped with the latest technical solutions, including the integrated BMS management system, modern ventilation, air-conditioning, electrical and technical installations etc. Apart from that, thanks to increasing competition among developers, the package of incentives is still expanding, causing a decrease in eff ective rent rates and increase in the standard of the office space offered. 
 
 
 
Total surface
Factor of non-leased surface
 
Kraków/ Cracow
383 200 m.kw.
9,6%
Wrocław
344 500 m.kw.
5,5%
Trójmiasto/ Tri-City
288 000 m.kw.
7,8%
Poznań
206 300 m.kw.
12%
Katowice
200 700 m.kw.
7,6%
Łódź
178 000 m.kw.
24%
Szczecin
40 000 m.kw.
5%
Source : Jones Lang La Salle – Poland: Modern Office Stock Q4 2009
 
Apart from Tri-City and Wrocław, the situation does not look so optimistic at all. ¡ e fact, that less modern offi ce space resources and low attractiveness of the rest of the cities for BPO sector, causes suspension of new projects and an increase in free space. A high factor of unused space, which in some agglomerations reaches the level from 9% to 24%, which causes a decrease in rates from the level of 16 to 12-13 EUR/sq. metres per month. However one has to remember, that it is characteristic for many regional cities to have a large number of revitalised complexes, in which it is hard to fi nd the standard off ered in buildings of class A or B+. Despite the fact of decreasing prices, the eff ective rent rate is not that competitive, when compared i.e. with Tri-City or Wrocław. It results in holding another office projects.
 
It is worth mentioning the fact, that Tri-City offi ce market is most of all created by the local, well- organised companies. Developers such as TPS, Torus, Hossa or Allcon know the value of a foreign tenant and cooperate with InvestGDA, when it comes to attracting investors from BPO/SSC sector. It is also possible, that a joint eff ort will soon result in the fact, that Tri-City will become the best location for the services centre, even more so because apart from the developers, many reputable Gdansk consulting and recruitment companies have already joined the group of co-workers.
 
 
 
Mariusz Wiśniewski