- Total investment transaction volume on the commercial property market is expected to exceed €3 billion -

Warsaw, 6 December 2013 – According to experts at CBRE, the world’s largest commercial real estate services company, in 2013 the Polish office market was driven by growth in the BPO sector (Business Process Outsourcing) and the trend is expected to continue throughout 2014. The reasons for the growing number of BPO projects in Poland include a favourable situation on the labour market, availability of modern office space and strong academic centres in regional cities. Due to the rapid expansion of the sector worldwide, the sophistication and complexity of the services rendered in the biggest office hubs in Poland is constantly increasing. Companies looking to outsource their processes to this country value the fact that they are often in the same time zone and that there are negligible cultural differences, which works in favour of Poland when considering a location for their shared services centre or R&D plant. Simultaneously, many smaller cities, like Szczecin and Lublin are successfully competing in attracting new companies from the sector. As the market grows, CBRE experts are seeing a growing interest in the peripheral cities like Bydgoszcz, Rzeszow and a number of others.

For the past two years, leasing office space has become easier for tenants in most large Polish cities. This is mainly due to an increase in speculative office space under construction and the resulting growth in vacancy rates in most of the regional markets. This situation is creating an opportunity for many tenants to relocate and enjoy savings in leasing expenditure. Rents for prime office space in Warsaw are at around 25 - 26 EUR/sqm./month while in non-central Warsaw and in the biggest regional cities of Poland they stand at 10 - 16 EUR/sqm./month. The total stock of modern office space in the whole of Poland now amounts to 6.8 mln sqm.

Konrad Heidinger, Consultant, Research & Consultancy Department, CBRE in Poland:
“In the first three quarters of 2013, there was around 791,000 sqm office space leased throughout 9 biggest agglomerations in Poland – that is 7% more than in the corresponding period last year. We are seeing that the interest of the companies from the BPO / SSC sector is more often drawn to smaller cities. However, new destinations pose little competition for the established locations. On the contrary, the processes managed in the biggest BPO destinations are gaining in complexity, while the basic processes are transferred to the smaller cities.”

Commercial property – investment market
Experts at CBRE expect that by the end of 2013 total investment transaction volume on the Polish commercial property market will exceed €3 billion. In their opinion this is a very positive result which underscores Poland’s position as an important destination for investors. According to CBRE, the biggest challenge for the market in 2014 will be the limited supply of core assets (meaning the best shopping centres, office buildings or warehouse properties in the largest cities). However currently there are several large ongoing transactions which should be concluded during the first or second quarter of 2014 further confirming the attractiveness and stability of the Polish market. Additionally, several sales of office, retail and warehouse projects are planned for next year in Warsaw and large regional cities, which should be welcomed by funds active on the market.

Przemyslaw Felicki, Associate Director, Capital Markets, CBRE in Poland:
„Following an increase in investor activity on the warehouse and logistics market in 2012, 2013 has confirmed strong demand in this segment. Yields have dropped to record levels (the H&M transaction in Poznan), while the number of investors looking for warehouse schemes has increased. There are also new players coming to the market, mainly from the USA, who were not active in Poland before and who are investing mainly in this sector.”