This has resulted in increased competition for older office buildings. Despite many benefits and amenities offered by the newest investments, including rent-free periods, attractive rental rates and innovative technology solutions, older buildings do not have to fail in the face of such competition.
Compared to its peers from the West, Poland's commercial property market is still very young and is growing rapidly. According to 2017 data by Colliers, there are currently 9.7 million m² of office space in Poland. More than half of it is in Warsaw, which over the last ten years has grown twofold – from 2.5 million m² in 2008 to 5.3 million m² in early 2018. Considering the huge growth and the continuously changing trends in office design and new technologies, even relatively young investments may soon be seen as no longer modern.
Nearly half of all office buildings in Warsaw are over 10 years old. Contrary to what one might expect, age is not the crucial factor that makes an office building seems modern, and the line between old and new is blurred. The key aspect of a building is its standard, which includes class and division of office space; the quality of finishing materials; eco-friendly solutions with BREEAM or LEED certificates; and availability of extra amenities for tenants, which make working more comfortable and effective such as leisure and silent-work areas, canteens and service outlets.
The newest investments increasingly offer innovative technologies and solutions, such as mobile applications and co-working space. To address commuting trends and employees’ needs, office buildings are equipped with extensive bicycle infrastructure, spacious underground parking areas, and even charging stations for electric cars. What developers currently offer often determines the approach of owners of older buildings. To retain tenants and remain competitive, they need to be more flexible and propose new solutions.
The location is invariably the biggest asset of any office building. Hence the great advantage of older buildings which are often located in city centres. However, the owners must maintain the high standards of their buildings and ensure that tenants continue to feel comfortable in them. Continuous capital expenditure, ongoing maintenance and renovation, and installation and space upgrades – nowadays these are fundamental if we want to retain a client.
These days, top technical standards are not the only things that matter. Tenants need to be able to derive extra benefits from staying in a given location. These may include additional amenities in the building or in its direct vicinity, such as a launderette or a kindergarten, or a wide range of catering services. Some tenants will appreciate the unique character of a place, for example cosy offices in a renovated and upgraded tenement house. Although a listed building only allows for limited upgrade flexibility, a prestigious address and elegant, classic architecture will be higher on the list of tenants’ priorities.
Recently, a popular trend has been to build a community around a building. The goal is to enable people in the buildings to get to know each other as well as to engage in communication in business and social terms. Events and marketing activities designated for tenants help to create a better atmosphere and increase the sense of belonging among building users. Well-being solutions are becoming increasingly popular – providing employees with development opportunities as well as caring for their wellbeing, health and safety, which all translate into effective work.
Managing older office buildings is also a huge challenge for property managers. It is up to them to offer new solutions that contribute to higher comfort at work. Professional support, continuous assessment of tenants’ needs, and new ideas allow for building a good relationship, which in the future often translates into business decisions. We have clients who decided to stay in an old location not only because the space had been renovated, but also because they were satisfied with the cooperation with the property manager. At Colliers, we put strong emphasis on client feedback. We want to know how they perceive a property, what their opinion is about the quality of services provided, what they think is missing, and what should change. This is very valuable knowledge for us, as it enables us to identify tenants’ needs, improve their comfort at work, as well as provide an appropriate budget for the property.
There are many excellent office buildings on the market, which despite being a dozen or so years old, are still perceived as modern and continue to enjoy considerable interest from tenants. An office building in a central business district managed by Colliers is a good example of a successful upgrade. It was a huge challenge for the owner, the property manager and the renovation company, since the redevelopment was conducted without interrupting the work of its tenants. After the upgrade, the new arrangement of the reception and halls, and the introduction of a number of modern amenities, such as QR codes and mobile applications informing about services available nearby, the building can easily compete with developers’ newest investments. Today, it is home to many global corporations with very high requirements.