On the crest of a wave

There has been little joy on the office market across Poland over the last two years. Has the situation been any different in the TriCity?

Mariusz Wiśniewski, senior director, transaction and advisory services, CBRE Poland: It definitely has. We have also had some acute problems with financing and reduced interest from investment funds. It also should be remembered that the TriCity is a relatively young market, which is more sensitive to economic changes. The TriCity market really got going in 2011, when the supply gained enough critical mass to attract large tenants, and for almost a decade the supply and demand remained remarkably in balance, as could be seen in the stable rents that were mainly determined by inflation and a healthy vacancy rate of no more than 10 pct (today it’s around 13 pct).

Has such stability been good for consultancies and their departments?

It’s definitely been good for us. Over the last twelve years, CBRE has taken on average a 50 pct share of the lease transactions in the TriCity and in Q1 this year the figure came to over 70 pct.

Tenants are all cutting their costs or signing leases for smaller office space or even giving some of it up. Has this also been the case in the TriCity?

Yes, this is clearly the trend. The first and the boldest took the decision to make reductions in 2020, just after the first lockdown, and others soon followed. Then the hybrid work model added to this trend. But the desire to cut costs is only evident among large companies with over 100 employees, since for smaller tenants such reductions don’t tend to result in meaningful savings. Incidentally, CBRE has been advising its clients to introduce a rotating desk system, which allows the number of workstations to be reduced by 20–30 pct without any reduction in the work comfort. but from actually looking at the data on the number of employees who actually turn up every day at the office and taking into account those on leave, away on business trips or working at home, we can see that these figures have always been and still remain stable.

Could you give us some minimum figures? By how much can an average firm limit its office space without having an adverse impact on its operations?

This very much varies from company to company and depends on many factors, including how the firm operates. From my experience I would say that reductions of more than 50 pct definitely make it harder for workers to return to the office. The research on this by the owner of the Olivia Centre, which is the largest office centre in the TriCity, is very informative. After studying how many workers come in, you can assume that you will always have 60 pct present in comparison to 2020 – in other words, compared to before the pandemic and hybrid work becoming common practice. If a company is looking to reduce its space, the golden mean would seem to be about 30 pct.

But on Mondays and Fridays everyone wants to work at home and, to be honest, they could even be in a rather more exotic place than sitting at home.

Yes, of course. That’s why camera glitches during video conferences are so common. But seriously, those peaks that mark the most popular days for working in the office have very much flattened out, since many people appreciate working on days when it’s quieter and easier to find a parking space – often on Mondays and Fridays. I would say that introverts much prefer these days and also those who have to concentrate on their work, such as those who work in analysis and accountancy. We can also see this in our offices at CBRE.

Can you also see this happening with flexible office space?

Of course. The flex office market in the TriCity is still regarded as young, so funds are still wary of it, but most operators are in some way connected to the landlord in some way, Nevertheless, the sector is growing very rapidly. There are always one or two operators in every large business park and they have no problem in finding clients. Many tenants of serviced office space are companies that treat it as a kind of testing ground. They will try out a city for a year before they decide to sign a traditional office lease for a longer period. And many of the key tenants now present in the TriCity started out from serviced office space.

When you look at the largest leasing contracts, you could come away with the impression that the TriCity was more geared towards air traffic than its sea port.

The first impression I get is that the main sectors are what I would call aviation and navigation. Of course, names such as Lufthansa, Airbus and Boeing are associated with aviation, but their operations go far beyond this industry. All of these companies have found excellent synergies with the Gdańsk University of Technology. The same is true of Intel Technology, which has been operating in the TriCity for the last twenty years and has been followed by two other giants from the microprocessor industry – Synopsys and Graphcore. This means that the TriCity is now seen as one of the global economy’s most important modern technology hubs.

Such praise sounds a bit strange from a man who lives in a historic building.

Yes, because of this I never take my work home (laughs). For the last seven years, I’ve been spending all my time on renovating my arcaded house in Żuławy, which dates back to the 18th century. I live there with my wife, children, dogs and cats. I can proudly say that it is one of the best-preserved buildings of this type in the region. It’s not just a hobby of mine, but it’s also a kind of time capsule that cleanly segregates my work life from my time with my family.

Interview: Tomasz Cudowski