Poland maintains strong positions in CEE office market 

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According to a recent analysis, in the coming year the number of jobs in the sector will increase by 6%, to nearly 377,000. Systematic growth of employment in the dynamically growing stimulates the development of office space market and strengthens the position of Poland as an attractive location for investors, ABSL informed.

Poland is today the largest office market in Central and Eastern Europe, offering 11.9 million m2 of office space. More than 707,000m2 of new buildings were delivered in 2020, a level comparable to 2019, still despite the economic slowdown. Developer activity also remained high and at the end of Q1 2021 there was almost 1.1 million m2 of modern office space under construction. Warsaw accounts for about 35% of new projects, according to Colliers, cited by ABSL.

The growing business services sector and the commercial real estate market are also shaped by trends resulting from the COVID-19 pandemic, which include, before all transition to a hybrid mode of work and the creation of flexible environments. Since the lack of predictability regarding global developments is still the key aspect, many companies postpone decision-making processes regarding new leases. Colliers experts predict an increase in the number of subleases and renegotiations of previously concluded contracts – tenants prefer renegotiating contracts and obtaining more favorable conditions instead of changing the office location.

The company has recorded an increase in renegotiations of leases on the office real estate market and an upward trend in the number of subleases as well as the ambition of some companies to reduce space despite the increase in employment, changing to a hybrid model of work. For the office market, among others, it will translate into a slower commercialization process. This state is estimated to persist for about 2-3 years. However, the demand for more office buildings as well as filling the existing vacant spaces will be secured by new companies that appear on the market and the increase in the number of employees in the modern business services sector.

Hybrid model

One of the major trends affecting office real estate, is the shift in the work model to a hybrid or completely remote model. After the Covid year, nearly 67% of employees said they would like to work from home more than 2 days a week, which is twice as many people as at the start of the lockdowns (37%), according to Colliers survey. This will require new behavior patterns and a redefinition of the role of office space in the future. The main challenge for employers will be to create the work environment as a flexible ecosystem – this environment will include the traditional office, the home, and alternative spaces – public spaces such as coffee shops, co-working spaces and other on-demand workspaces.

According to Colliers, before the pandemic, about 80% of typical office space was dedicated to individual work, while in the future, this proportion will change – even 50% or more of the space will be dedicated to solutions supporting cooperation and interaction. In practice this means less need for long-term space leasing and the proliferation of the “hub & spoke” model, in which a company has a main office and flexibly uses ancillary space that is more conducive to effective work.

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