Going local

Most new office buildings and retail centres in Warsaw are leased by international agencies and only rarely by those of Polish origin. We took a closer look at the differences between local agencies and the Polish branches of large international real estate companies

One of the quaint buildings on Krakowskie Przedmieście is the headquarters of Kancelaria Brochocki Nieruchomości. Its avant-garde interior and the casual dress of its employees mark a contrast with both the modern office buildings, western real estate companies tend to make their homes in, and the dress code their employees have to comply with even in summer. "You aren't coach drivers," is how one boss of an international agency puts it to his staff. These are perhaps the most apparent differences.

Hello, my name is ...
However, Andrzej Brochocki, head of Kancelaria Brochocki, places the distinction elsewhere. In his view, while most of the Polish agencies focus on the housing market, the international agencies tend to deal with commercial space. Janusz Iracki, Director of Maxon Nieruchomości, adds that foreign agencies work mainly with newly constructed buildings and remarks: "it must be said that when international agencies first entered the Polish market, they did so with lots of experience and address books full of contacts all around the world, which is why they quickly dominated a considerable portion of the market". Sebastian Proć, Director of Unikat Nieruchomości Komercyjne, recognizes yet another factor: "when a new, for example English, company arrives in Warsaw it is already familiar with such names as King Sturge or Jones Lang LaSalle and is more inclined to cooperate with them. We, on the other hand, have to introduce ourselves right from scratch".

Urbi et orbi
How do Polish firms manage when confronted with international giants? Indeed, is confrontation the right word when we consider that Polish agencies employ people by the dozen and their international counterparts by the thousand? It would seem that being local has its price.
Janusz Iracki of Maxon Nieruchomości, a company in charge of such buildings in Warsaw as Warta, claims that when operating in a market dominated by multi-national agencies, the Polish companies need to look for a niché. One of these is the secondary market which the international agencies aren't so keen on: "one must ask oneself whether it's worth struggling away in the crowded part of the market when there's lots of work in the less popular sectors," says Iracki.
Sebastian Proć of Unikat appreciates the value of his company's local character. "As a Polish firm with in-depth knowledge of the market, we are a reliable partner for any foreign firm wanting operate in Poland. Our Polishness might well be the reason why we work so effectively with governmental and municipal administrators. We have found headquarters for the Chief Inspectorate of Personal Data Protection and the State Insurance Supervision Office."

Small wonder?
Polish real estate companies working in the commercial market are not as diverse as their international competitors and deal mainly with offices and shops. Their specializations tend to be narrower and they involve themselves in smaller projects. The offices they deal with aren't necessarily in office buildings and the shops aren't always in shopping centres: the high street is often their domain. Kancelaria Brochocki, for instance, has found premises for a number of Warsaw bars such as Soma and Szpulka.
Foreign agencies came to Poland at the same time as foreign developers and when the first modern buildings were erected in Warsaw the latter dictated all the conditions. International companies' concentration on modern quality space, for which there was enormous demand, meant they could shake the pagoda-tree quite undisturbed. Today's market however is a different matter all together and paradoxically this works to the advantage of Polish agencies. "What we are dealing with at the moment is a tenants' market, where they can pick and choose where they want to work from. A lot of companies expect low rents and opt for older, lower class buildings. It's often the Polish agencies, relatively uninvolved in the new office buildings, who can meet these requirements," says Brochocki.

Realistic demands
The history of the Paged building which stands on Pl. Trzech Krzyży is a very good illustration of the above. An international agency had been unsuccessfully trying to lease it for a long time but when Kancelaria Brochocki took over, it managed to find four tenants (Still King Films, PPI, Eficom and Bridgings Polska) to take up 2,000 sqm, and all within the space of two weeks. Why didn't the foreign agency succeed in this? "I don't know. They might have asked for rents which were too high," says Brochocki. "We operate as part agent part consultant, and when we can't agree terms with a client we simply move on. If we hadn't negotiated the rent, the tenants are now charged, with the owner of the building (USD 12 sqm and a USD 3.5 sqm service charge) we mightn't have managed it at all. It is quite feasible that the previous agency persuaded the owner to ask for rents that were too high. There's another 3,000 sqm of free space in Paged."