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Marek Ciunowicz: a major challenge is adapting to the evolving needs of employees
The Polish office market in Q3 2024 is experiencing dynamic shifts, with significant regional differences in availability and new supply. While Warsaw remains the leading business hub, cities like Wrocław and Kraków are expanding their office space offerings. The latest REDD Report highlights a stabilizing vacancy rate and rent variations across locations, underscoring the market’s flexibility. This report provides invaluable insights for tenants and developers alike. Discover expert opinions on the current state of the office market.
Marek Ciunowicz, Corees Poland:
Market Situation in Q3
Although the market remains challenging with a number of obstacles ahead, it can be stated that the situation in the third quarter of this year was stable, with some signs of revival. The previously observed trend of employees gradually returning to office work continued, as did the optimisation of the balance between in-office and remote work – favouring the former. Lease renegotiations were still common, largely due to the expiration of contracts signed before the pandemic. Rental costs continued to rise.
Biggest Challenges
A major challenge is adapting to the evolving needs of employees, who now con- sider not only convenient access to public transport or office amenities such as ergonomic workstations and a well-equipped kitchen, but also factors that pro- mote overall well-being. Therefore, the availability of spaces designed to enhance mental and physical health has become crucial. Employees are also increasingly focused on ‘green’ aspects, with growing awareness and a collective desire to contribute to planetary health.
Another important issue is the rising rental costs, driven by increases in utility prices (including electricity), higher construction expenses, the rise in minimum wage, and a relatively low supply of premium-grade office space.
Protection against cyberattacks and natural disasters, which can lead to tech- nological failures, is also gaining importance. Achieving this requires specific resources: personnel, suitable office spaces, technologies, and communication systems. Risk analysis and business continuity strategy teams are being esta- blished to address these challenges.
Sustainable development is another challenge. For office building owners, it has become a commitment to invest in eco-friendly solutions, driven not only by internal strategies but also by EU regulations. Older buildings will need to be demolished or undergo modernisation.
I expect that employers’ approach to remote work will also change. Increasingly, we hear concerns that remote work negatively impacts interpersonal relationships, maintaining organisational culture, and productivity.
Trends
The increasing return of employees from remote work to offices is impacting the quality of business operations. Many companies now view remote work primarily as a motivating factor. Hybrid work arrangements are very popular, with employ- ees working in the office 3 or 4 days a week and remotely on the remaining days.
Despite earlier predictions of a rise in the popularity of coworking spaces, they have not achieved the desired level of stability. Some coworking offices have begun to face financial difficulties, as this type of space has not experienced the expected growth trend. Of course, there are locations that remain consistently popular with companies, but this is not the norm.
Subleasing office space has become an increasingly common practice. It allows tenants to move into a ready, fully equipped office space, while landlords can reduce the number of vacant spaces.
Sustainable development efforts are set to expand. Organisations and businesses will continue to invest in eco-friendly solutions, such as energy-efficient buildings and environmentally friendly spaces. Clients will expect building owners to ensure that their offices meet sustainability standards.
The importance of technology and digitalisation will keep growing. Companies will invest in innovations, such as space management and communication systems, aimed at improving work efficiency and employee comfort.
Ultimately, the key to long-term success in this market remains consistent: a well-managed, prime location at a competitive price.
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