Two years of positive change

‘Eurobuild CEE’: The office market in recent years has undergone an accelerated transformation due to various disruptions – the pandemic, the war in Ukraine and the so-called “great resignation”. Has it been able to meet all these challenges?

Marek Stasieńko, the leasing director of Skanska’s commercial business unit in Poland: The pandemic and the war, along with their consequences, have challenged the status quo in virtually every aspect of our lives. The office market is still adapting to these changes. It’s a process that’s still ongoing and will continue, due to the dynamic changes taking place. From the tenants’ perspective, the pandemic has changed a great deal at the operational level – it has shown that work that was previously done only in the office can in many cases be done just as well at home. Therefore, having achieved relative stability, companies are trying to create a new work environment that will help employees perform tasks in a hybrid model, combining work at the office with work at home and/or at a third location. However, I believe that we are still at the stage of testing this system, because no one knows what consequences it will have in the long run. For developers, these past several months have also been very demanding as they have had to respond to completely new tenants’ needs in a short period of time. Hence, these days developers are not only concentrating on office space, but also on the location and available transportation, but on the architecture and the surrounding area, the amenities in the office building, as well as the innovations, functional solutions and systems in order to adjust them to the new working model. The last two years have thus seen a positive qualitative change in the market.

Skanska has already carried out four surveys of office employees. How have attitudes changed over the past year?

Our surveys show that more than 50 pct of Polish office workers in large cities now work in a hybrid model. So, we have seen an increase compared to May of last year, when only 32 pct of respondents worked this way. The number of people exclusively working remotely has decreased, from 16 pct to 8 pct y-o-y. Our survey confirms that hybrid is the most preferred working style, with as many as 70 pct of respondents saying they would like to work this way. Companies are introducing various systems of hybrid work, but a new trend in terms of how this is organised is becoming more and more pronounced, namely the 50/50 format, i.e. one week working in the office, one week working from home. Employees and employers, after initial enthusiasm about working only from home, are now admitting that the traditional office is irreplaceable – or so 9 out of 10 respondents say.

Has the growing popularity of the hybrid model affected the rental market in Wroclaw?

You can see how this model has translated into the demand for office space in Wroclaw as well. However, it should be borne in mind that clients’ requirements in this regard are very individual. The main requirement that tenants now have is to be flexible in terms of potentially increasing or reducing their workspace requirements. Some companies are still growing and are looking for additional space, while others have made minimal adjustments to their office size, and there are some that have even reduced their space by as much as 40 pct. It all depends on the company’s business profile, whether the work requires direct physical interaction between employees and customers, the creation of innovations on site or the use of specially designed systems that cannot be moved in-house. Much also depends on the age of the employees. For organisations that employ people in their 40s and 50s, the ratio of hybrid work is lower, because this generation wants to work from the office. Among the younger generations, the proportion of hybrid workers is higher, reaching almost 70 pct. Therefore, companies need to consider many different factors when making this strategic decision regarding office sizing.

There’s a lot of talk these days about the requirements of the hybrid workforce, but how is it with tenants? Have you noticed any changes in their expectations?

We are very thorough in analysing the situation with tenants and have been working closely with them to determine the best solutions for their organisations. We have been holding workshops to help them better understand the preferences of their employees, as well as what Skanska can do for them and offer them to precisely address those needs. Companies want employees to work from the office because it’s a place that fosters integration, reinforces organisational culture, and acts as a platform for sharing knowledge and ideas. We see that hybrid working has sensitised employers to the needs of their employees, especially when they are struggling to attract the best professionals on the market. So they are trying to create an optimal workplace where people will want to come to on their own initiative. From the developer’s perspective, we can see that there are certain factors that employees pay attention to and that help encourage them to work at the office. It’s not just the additional features of the office space, such as the greenery, relaxation spaces or terraces, but also the services in the building and the surrounding area, such as medical clinics, shops and kindergartens. For employees, all of this gives them extra motivation, because they know they can still get their personal errands done by coming to the office.

Getting back to Wrocław. What are the specifics of this market? Have you observed any significant changes or trends in the city?

In terms of size, Wrocław is the second largest regional office market in Poland after Kraków. It’s also very dynamic, dominated by IT and modern business service companies. It’s relatively stable and resistant to turbulence, so it has managed to recover quickly from the initial shock of the pandemic. In 2020/2021, office leasing in the city was dominated by renegotiations, but now the number of new lease agreements is growing. All of this is confirmed by the figures. In Q1 2022, Wrocław saw the most office space leased of any regional market.

What are the advantages of Wrocław and its prospects for the years ahead of us?

Wroclaw is a mature and interesting market – both in the eyes of tenants and investors. It’s a dynamic academic centre with a strong economic and cultural base. The city is attractive to live in, as reflected by its positive migration rates. The city’s proximity to the German and Czech borders, as well as its well-developed infrastructure, means that a great many companies – not just logistics firms – have decided to expand their operations here. and because of its history, Wrocław has a unique vibe within Poland, which is recognised by investors who are interested in buying real estate there.

What is Skanska focused on at this challenging time? How would you like to grow further in Wrocław?

At the beginning of the year, we sold the first phase of Centrum Południe. At the moment we are focusing on finalising the construction and commercialisation of the second phase of the complex. With the completion of this project, by the end of the year we will have delivered around 20,000 sqm of sustainable office space in Wrocław. In addition to offering core office space, we are also focusing on further developing our flex space through Business Link – a Skanska Group company that offers serviced workspaces in Wrocław, among other cities. Interestingly, Skanska in Wrocław is now based in a Business Link office – which should be all the confirmation you need of how much we believe in our core and flex models.

LEADING IN LEASING

Marek Stasieńko acts as Skanska’s leasing director and leads a team that commercialises office, retail and service space in the developer’s projects in Wrocław, Kraków, Katowice and Poznań. He and his team have been responsible for major leasing deals with such companies as with Nokia, Credit Suisse, HP, UBS and Amrest in Wrocław, ABB in Kraków, PwC and Capgemini in Katowice, as well as Rockwool in Poznań.