Height matters

The tallest building in Poland and also the entire EU is Varso Tower, which was completed by HB Reavis just two years ago. The skyscraper has 53 floors and a total height of 310m (230m at roof level) – and no plans currently exist for the construction of any building that might surpass it. Warsaw also has the next two tallest buildings in the country (Warsaw Spire and the Palace of Science and Culture), but fourth place goes to Sky Tower in Wrocław (212m, built in 2012). Gdańsk comes next but some way behind with Olivia Star in 11th place (180m, 2018) followed by Katowice with KTW II as the 22nd tallest (134m, 2022). But how tall does a tall building have to be? “Under Polish law, just like in other jurisdictions, there is no definition for what a tall building is. In this regard, we are governed by unwritten rules,” points out Joanna Blumert, the head of occupier services at Cushman & Wakefield. “For example, in the US a building of over 150m is considered to be a skyscraper and the ‘top level’ is often not just one floor but several,” she adds.

The highest floor price-wise

Unsurprisingly, the privilege of looking down onto the world through glass walls comes at a price. “The asking rents for some of the best buildings in Warsaw are around EUR 30 per sqm, but when it comes to the larger transactions we have seen over the last few years for a thousand or a few thousand square metres, the owners can provide a package deal and drop the price,” reveals Anna Szymańska, the head of the office department and director of office space at Newmark Polska.

“Even though the rental rates in a building are determined by the strategy of the developer, as a rule the top floor costs more,” stresses Joanna Blumert, who adds: “Such a strategy very much depends on how much tenant interest there is in the building. What we’ve seen with previous transactions are rates that are around 10 pct to 15 pct higher.”

Anna Szymańska highlights another aspect of the differences between floors. “For leasing a single floor, the differences in rent between the lowest and the top level can be more than 30 pct,” she says, but also points out that this differs depending on the level of commercialisation. “The conversations I have with owners are different when the building is empty and only preliminary negotiations are underway, and when it is already mostly leased out,” she emphasises. Building owners usually reserve these floors for those who are prepared to pay premium rates. “Building owners try to maintain the value of this space, so there is not much flexibility when it comes to the price. However, top-floor space does occasionally turn up on the subleasing market,” adds the Newmark director.

Why are tenants prepared to pay more for being higher up in a building? The answer might seem obvious – they are paying for the prestige and making a statement about their position on the market, which in turn can attract competitors. But, despite the fact that not everyone can afford the highest rates, this is not everyone’s dream. “The clients of many companies might believe that the high rental costs for such prestigious offices result in higher service charges and bills for those who employ them,” says Joanna Blumert.

Top tenants on top floors

So, which companies and industries are unafraid of being perceived this way and are the most willing to take the top floor of a glass tower? Mainly financial institutions and law firms, according to Anna Szymańska. “These are companies for whom status is important and they can afford to pay for it. They normally treat such prestigious locations as a means of attracting talent,” she suggests. Joanna Blumert also adds consultancies, banks and insurers to this list.

Our two consultants also point out that top floors often have smaller floor plates than the others due to how the building is constructed. Architects have to find room for the building’s installations on the upper floors along with the office space itself – and this has always had a direct bearing on the demand. Joanna Blumert also highlights another issue. “With pre-leased projects, the top floors are often reserved for large anchor tenants and the announcement of their leases often marks the launch of the project,” she says.

Ghelamco is among the developers with the most experience of leasing out top floors in Poland and is currently building its latest project – a glass tower it has named The Bridge, next to the Rondo Dmowskiego roundabout in Warsaw. “Its immense height and the panoramic views from its windows could be a huge attraction, but there are two types of tenant (and they are both equally important to us). For some, this is of huge importance, but for others it is a secondary consideration.” claims Jarosław Zagórski, the managing director of Ghelamco Poland. “At one time, the floor number was more important, due to the US corporate style approach that prevailed. The bigger the floor number, the further up you were in the hierarchy. Of course, there are still companies for whom this is a key factor and they make this clear by telling us – either you give us the top floor or we will have nothing to do with this project,” he adds.

Until recently, it seemed natural that if a company occupied a few floors at the top that this was where the company’s management would be housed. “These days, you can often find common space there or conference rooms. Once the dominant approach was that the most important people worked at the top level, but that’s now changing. This space is becoming an arena for the social life of a company,” reveals Jarosław Zagórski.

And then there are the downsides

But it’s not just the rent that plays a role in the choice of office space – there are also practical considerations. “When we talk to clients, we have to consider a range of factors, such as the wellbeing of their employees and data security. So, we carry out surveys and hold workshops to find out the sort of challenges and restrictions that are important to any given organisation and its employees,” says Mariola Bitner, an associate and the head of workplace strategy at Cushman & Wakefield. “Some companies don’t want to occupy lower floors, because it might be possible to see what’s on their computer monitors from the neighbouring building or from the street,” she explains. She also adds that a high floor could act as a magnet for recruiting talent and thus comprise part of the company’s employer branding strategy. But this could also be a disincentive in some cases, as not everyone feels fine at a great height and some people might even be afraid to go near the glass walls. “For some, this can be such a huge problem that it affects their choice of employer. Express lifts can also cause some people discomfort,” says Mariola Bitner. And then there are the potential emergency situations. “It takes a lot longer to evacuate the top floors, not to mention the challenges of evacuating those with disabilities,” she admits.

Even though we normally associate the top floors of office buildings with panoramic views, in densely built-up office districts all we can often see from them are the windows of neighbouring buildings. And then there’s the fact that the sun often disappears for weeks on end at our latitude. “Top floors are already at cloud level, so sometimes all we see through the window for the entire day is a white wall,” admits Joanna Blumert.

Entertainment at the top

Increasingly, amenities are being added to office buildings, and as a result they no longer close up after office hours. Such non-office uses can also be found at the top of such buildings if the spectacular views are an advantage for them. “In other countries, you can find restaurants at these levels as well as event and recreation space or even galleries, viewing points and observatories. But here in Poland, such variety is a rarity,” observes Mariola Bitner.

Sky Tower in Wrocław has a viewing point open to the paying public, where the area has recently been renovated and extended to include a bar. At the top of Olivia Star, there is also a restaurant and conference space (if you’re not a tenant, you have to pay a fee to go there). HB Reavis announced a few years ago that it would provide similar amenities in Varso Tower and recently revealed that the three top floors are to be occupied by Magnicity for the next 20 years, which in the summer of 2025 is to open a bar with a 1,000 sqm viewing platform. For a fee, customers can get there via a separate elevator.

Mariola Bitner of Cushman & Wakefield also emphasises that opening such space to the public can generate issues for tenants of the building with high security requirements, such as government agencies and financial institutions. “For this reason, you need to plan to have a separate elevator with its own entrance at the design stage. Areas that are open to the public, such as restaurants and galleries, also require the reception to be organised differently, because the number of guests arriving without access cards is greater and difficult to monitor,” she says.

You spin me right round

Skyfall in Warsaw Unit (at a height of 202m) and LookUp in Skyliner (195m) represent a slightly different approach. These are both events areas that are located way up above street level. “Skyfall can be rented for conferences, product presentations, business lunches as well as company parties and birthdays,” Jarosław Zagórski informs us. Skyfall also has an additional attraction in the form of a rotating area with a glass floor. “To get to Skyfall, you can use a separate fire elevator, which is outside the closed-off office space. We are also considering opening Skyfall up to the wider public,” reveals Ghelamco’s managing director.

The space now occupied by LookUp in Skyliner has undergone something of an evolution. “From the very outset, we wanted the top of Skyliner to be somewhere spectacular. Furthermore, we wanted to integrate it with the business district to keep it alive after working hours,” explains Szymon Zduńczyk, the managing director of Karimpol Polska. He also tells us that the two top storeys of Skyliner were originally intended to be open to the public, which is why floors 41 and 42 are served by a separate elevator. “We were already in advanced negotiations with a number of well-known restaurants, but Skyliner came into use at the height of the pandemic, so leasing out the space to a caterer was impossible. Everyone in the sector was worried about the future and so operating a normal B2C business there was too risky,” recalls Szymon Zduńczyk. “Because of this, our original concept evolved and eventually we came to a sort of compromise. The space can be leased for any kind of event in any kind of configuration, both during the day and in the evening,” he explains. The 41st floor of Skyliner now offers banqueting and conference space, while the 42nd floor comprises an open space loft area with a height of 14.5m and an area of 270 sqm that can seat up to 200 people. Since LookUp was opened in September 2023, almost 100 different kinds of events have been held there. The space is leased and operated by Villa Foksal, which provides other tenants of the complex with preferential reservation terms.

As can be seen, additional facilities can be an attractive supplement to what a building offers, including for the other tenants, but it can also pose some difficulties for the building manager. It’s much easier to manage space that people use during specific hours of the day – but when a tenant needs to host some kind of event, they don’t have far to look.

Anna Szymańska also points to the fact that decisions about different usages depend largely on whether this is a single building or part of a complex and also whether the building was developed to be sold or kept within the developer’s portfolio. This is also important in regard to positioning the project. “Whenever we embark on a new development,” reveals Jarosław Zagórski, “we always try to find some specific feature that differentiates it. This forms a major part of our marketing. Skyfall in Warsaw Unit was intended to be a talking point of the building so that it wouldn’t be just another skyscraper on the market.”

Panoramic views from the terrace

The top floors can also include terraces available only to the tenants on these levels. In Warsaw Spire, one company, which operates at a height of 180m, has access to a 700 sqm terrace. The Bridge also will have an exclusive terrace for one of its tenants.

Upper One on al. Jana Pawła II in Warsaw, which is to be completed in 2026 when it will reach a more modest height of 130m, will include three exclusive terraces on the 28th to the 30th floors with 400 sqm of green areas. “The largest of these will be almost 200 sqm and all of them are to be commercialised. We are giving our tenants exclusive access to them under their lease agreements,” explains Henryk Bilski, the leasing director of Strabag Real Estate, the developer of the building.

Skyliner II (with a height of around 130m) will have garden terraces on the top floor with a total area of 900 sqm. “Each will have its own individual character and different possible uses,” claims Szymon Zduńczyk of Karimpol. The 570 sqm terrace on the very top floor of the building has been designed with a mini amphitheatre and a stage, outdoor coworking space and other space for events. “We are also working on a business model where we will include terraces, but just as in the first stage of the complex we don’t want to restrict their use to just one company,” he insists.

Anna Szymańska believes that those companies that want to lease top-floor space have already done so and thus we are probably going to have to wait some time for another such transaction. “A large corporation would have to make some kind of spectacular entrance into Poland, but we know that such prospects exist and this does happen. Over the long term, the office market will grow, so the newly-built space will also be filled. We just have to wait,” she predicts.