According to ‘"New Office Locations in Poland” report published by
Jones Lang LaSalle, Rzeszów, Kielce, Białystok, Opole, Bydgoszcz, Olsztyn, Toruń and Radom have emerged as start-up and alternative office destinations in Poland. The demand in these markets is generated by local companies seeking more functional and prestigious locations. The major growth factor, however, is the interest shown by external investors. Numerous companies, especially from the business services sector, tend to locate their new units outside the largest agglomerations, to ensure access to qualified workforce and cost effectiveness. The analysed locations currently feature more than 30 such investments.
The modern supply of office space in the eight cities analysed amounts to over 260,750 m², which accounts for 5% of the entire office stock in Poland. The standard of newly developed projects continues to improve. Currently, 57,600 m² of A, B, and B+ class office space is being developed. The leading markets in this respect are Olsztyn (15,400 m²) and Radom (13,000 m²). Moreover, a further 114,000 m²is planned to be developed in buildings offering up to 1,000 m² floorplates. The trend is for new projects to be developed in city centres, with good connections with other parts of the city by car as well as by public transport.
Monthly office rents in these markets are between €8-11 m²/month and remain competitive in comparison to the largest Polish agglomerations, where office rents are between €11-15.5 (excluding Warsaw). Another factor driving cost effectiveness for companies are labour costs, which remain 10-15% lower. On average, the monthly gross salary in the analysed cities is PLN 3,338, while for instance in Krakow and Wrocław it is PLN 3,806, and PLN 3,670 respectively.
John Duckworth, Managing Director in Poland & CEE, Jones Lang LaSalle, said: „The factors that are important for investors, especially in the dynamically growing business services sector, include: high-standard office space supply in prime locations, attractive rental values and access to qualified professionals and graduates. At the moment, one of the key issues for the SSC/BPO companies is the talent pool. In large agglomerations we are now dealing with substantial market saturation. Service centres are beginning to compete with each other in talent retention, which increases the costs and distracts them from their core business. Therefore, companies are seeking alternative, attractive locations.”
There is a growing demand amongst companies for employees with specialist knowledge and foreign language capabilities, and corporations are interested in cities with strong academic centres. According to the Central Statistical Office’s (GUS) data, in 2011, in the analysed cities, there were 58 universities, with 91,100 graduates. This number has grown in recent years and now accounts for around 20% of the total number of graduates in the country. Bydgoszcz and Toruń have the biggest potential in this respect, supplying 21,000 graduates to the labour market every year. Rzeszów (16,500 graduates) and Kielce (13,700) ranked third and fourth. It is worth noting that Bydgoszcz, Toruń and Rzeszów have the highest number of graduates holding an economics degree. In addition, Białystok and Radom are also highly placed in this area. Importantly, foreign language capabilities among students from these eight cities remain at the national level. The most commonly spoken foreign languages are English and German. Russian language skills in these cities are better than the national average, likely due to the fact that three of the analysed cities, (Rzeszów, Olsztyn and Białystok) are located in Eastern Poland.
Another factor contributing to commercial real estate market development is the increase in the standard of living. According to the Social Diagnosis research project conducted by HAYS in 2011, 80% of the residents living in the analysed cities positively evaluated living conditions and public safety levels in their cities.
Anna Kot, Head of Offices, Jones Lang LaSalle Poland, commented: “The report points to eight new, strong locations on Poland's office map. It is worth noting, however, that the office market is also developing in other cities whose populations are about 100,000. This is mainly the effect of addressing the needs of local companies and institutions, especially in the finance and IT sector. Here as well, the growing interest from SSC/BPO investors can be observed, especially in Nowy Sącz, where an interesting project, Miasteczko Multimedialne, is being developed, as well as in Zielona Góra and Częstochowa, where new office space is starting to be on offer.”
