Moderate optimism
Although both office developers and consulting companies are convinced that the office property sector will avoid the second wave of the crisis, we cannot count on an increase in supply in the coming years. The cause is still the reluctance of banks to finance such projects - so in short we can summarize the most important conclusions of the lively discussions that took place during the 5th edition of the conference "Office buildings in Poland."
The conference, as usual, was a major event in the industry - more than 170 participants, including the vast majority of the greatest players in the modern office market turned up at the Marriott on Oct. 27. Although unofficial talks sometimes complained that the Polish "office" is still struggling with the effects of the global economic downturn of 2008-2009, the panel discussion was dominated by moderate optimism. A good sign for the market was high interest in Polish office buildings this year, as investment products among German and Austrian real estate funds, which collectively returned to the market by the Vistula River. In the first half of 2011 transactions were finalized by giants, such as Deka Immobilien, RREEF and IVG Immobilien. Poland is the undisputed leader in Central and Eastern Europe: 40 percent GDP of this region is elaborated here. The advantages of your country may include low public debt in relation to gross national product, and a stable and conservative functioning of the banking sector, which is gaining a lot of deposits in the country is independent of imported capital. Skilled workforce, cheaper than in Western Europe, makes many companies to create their branches here or relocates branches of some activity, such as accounting or information centers - praised the Polish market, a special guest, Bruno Ettenauer, Chief Executive Officer of CA Immobilien Investment Fund Anlagen AG, during the opening speech of the conference.
Optimistic, but also with some temperance, approach the current market situation the consulting companies. Large reserves of our market were emphasized, compared to countries of the so-called old EU. Warsaw aspires to be the capital of the CEE region. There are 3 million square meters of office - not too much, if we compare it, for instance, to Vienna, where there is 10 million square meters. Please note that the public sector in Poland is just waking up as a tenant of modern office space - quite the opposite than in Western Europe. In the future, however, it can play a significant role as a creator of demand - said Monika Dębska-Pastakia, President of RICS Poland and consulting company Knight Frank Sp. z oo
When forecasting the demand for modern office space in the coming years, opinions were divided. According to Anna Staniszewska, director of Consulting and Market Analysis at DTZ Sp. z oo, a key factor in the demand will continue to be the amount of renegotiated contracts. Demand understood as the gross number of transactions in 2012 will increase due to the renegotiations. Many contracts were signed in 2007-2008 during the boom period, usually for 5 years. These contracts will expire in the coming months and will have to be renegotiated. I expect, however, that in the 2013-14 period, the demand will be lower - predicts Staniszewska.
Market situation is slightly better rated by Karol Klin, director of the largest commercial office developer in Poland, Globe Trade Centre SA. According to him, the demand will stimulate the growing popularity of Poland as a place for new investment in BPO sector (Business Process Outsourcing / Shared Service Centers). Poland is becoming a center for this type of investments. Good range of real estates, combined with the low cost of skilled labor will continue to attract foreign investors of this sector to Poland. Here is the chance for the growth of the net demand. Availability of qualified, with knowledge of foreign languages work force, availability of office space and public support from the city will allow a dynamic development in the future of cities such as Katowice and Lodz - says Klin.
Pessimistic wind blew during the panel for the financing of new office buildings. Even though the tenant returned to the market, banks are still very wary of lending to the office developers, making the funding dependent on the number of pre-lease agreements, sometimes even for 30-40 percent of the proposed lease area. The crisis has allowed us to verify, with which clients can we go on, more boldly, and to which we apply a more "book approach". The vacancy rate in the city and the tendency of local tenants to sign a pre-lease agreements shows us if there is some interest in the new surface. Number of signed agreements of this type is for us the proof of the quality and strength of the investor and its ability to service the debt. It is not like this, however, that the banks treat the pre-leases as something indispensable. In exceptional cases, banks refrain from it - defended the interests of bankers Beata Latoszek, Manager of Real Estate Finance and Corporate Banking at Bank Zachodni SA. In a similar vein, spoke Maciej Tuszyński, CEO of the bank Westdeutsche ImmobilienBank AG. We observe and analyze the demand for ready projects, the strength and experience of the investor is also taken into account by us when granting credit.We also check the location on the premises ourselves. Only after this, we sit down to talk about the details of the loan agreement and the amount of pre-leases.