Offices surprising everyone

After the apocalyptical visions for the office market, and especially the Warsaw office market, depicted last year, the outlook for this market segment has slightly changed.

It was mainly because of exceptional demand from tenants and strong demand from investors. With the office supply levels hitting 7.5 mln sqm across Poland, we are still lagging far behind such cities as Vienna. But the Polish office market gets more mature with every year and so it now starts to face new challenges, the growing demand from tenants being one of them. Last year their skyrocketing interest turned to be the biggest surprise as it contributed to breaking new records. Now everyone keeps their fingers crossed for the tenants’ appetite for offices to remain robust. However, the market gets increasingly crowded and in order to catch their eye you now need to offer your tenants the right product. The price and additional profits still matter. But since it is hard to go below a certain price level, developers start using the quality of the space offered to compete with each other. As a result, we are now witnessing their aggressive battle in that matter, and it often starts as early as on the drawing boards at the architectural studios.

When an office project is being designed, its authors need to think a few years ahead, about the solutions not yet popular. Only with such strategy in mind the project has a chance to be sold off at a reasonable price later in the future, when the development and commercialization processes are completed. Office property business resembles riding a roller coaster: each ascend is followed by descend. Concerns about yet another descend have been here for quite some time now, in spite of the record-setting indexes we all hear about. When will a downturn take place? This is probably one of the most important questions one should be posing now. Whatever we like it or not, we will get the answer to this question sooner or later. What is for sure is that caution, luck and impeccable maths skills will not do you any harm in the years to come. Unless, of course, the market surprises us all once again.

I wish you a pleasant read,

Tomasz Szpyt-Grzegórski