CBRE experts decided to take up discussion on class B buildings, which form a significant part of the Polish office space both in Warsaw and in the regional cities. Often the owners and managers of this class of building, when loosing the key customers, have a dilemma, what the next action to take. There is a choice of reducing the rental rate, but also the possibility of demolishing the building to replace it with a more modern design. Class B Office buildings, however, have their strengths, which are often seen by the tenants.
By carrying out a number of processes when representing our customers, in recent times, we have noticed a strong tendency - the vast majority of tenants put savings and optimization of expenditure of the business first, even at the cost of some sacrifices. You should expect that this trend will remain for at least another year. Our customers often wish to be presented with offers for class B buildings. They consciously declare that they are willing to accept a lower standard in return of expecting better financial conditions. However, in practice, this relationship does not work in every case - says Joanna Kalinowska, Director of the Building Space at CBRE.
The total number of class B Office buildings share of resource in Warsaw is currently over 65% - more than 2.5 million sq.m. The class B buildings are represented primarily by the town houses suited for Office use or buildings which were supplied on to the market in 1990s to 2005. At the moment, the class B buildings vacancy surface ratio is lower than the vacancy rate in class A, at 9%. Unfortunately, soon it will change and older buildings will have to deal with a situation where, paradoxically, the hiring of a new class A office space will be cheaper than B - comments Konrad Heidinger, Consultant in Advisory and Market Research at CBRE.
Administrators have broad leeway in connection with class B offices. There is a trend of the conversion of older buildings in Western Europe and the United States at the moment . This has to do also with the ecological aspects -renewed objects often apply for the certificate. This situation in Poland does not take place, because it is easier to demolish the existing building to build a new one.
The full version of CBRE's comment Through the Expert's Eye in the PDF version is shown below.
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