3 Questions about Modern Business Sector in Poland - part 3

Interview with Anna Młyniec, Head of Office Agency and Tenant Representation, JLL

Question 3

How have the dynamics of the sector and its needs changed over the years? What sort of an office are companies from the BPO, SSC, R&D and ITO sectors looking for in Poland? What is most important for them when making a decision?

Issues such as the ability to expand and develop within a location or a properly constructed lease agreement are of the utmost importance for this sector. It is worth remembering that the tenant has the right to flexibility guaranteed by the contract. Typically, these documents are signed for five years. Under such a contract, the tenant has the option of reserving the right for expansion in the building or the right of first refusal – in the case of large tenants, this may be the right to cover the area adjacent to the office they already occupy, i.e. next to or on an adjacent floor, and even to any area in the building that becomes available. Another important aspect to be negotiated in a lease agreement is the right to reduce the space occupied during the contract at no additional charge. It does happen that while companies are working on a project, they need more space at the start, and when it reaches completion, their needs may lessen. The reverse situation is also possible – in any case, the right of expansion secures the company at a stage of rapid development and eliminates the necessity of leasing additional space or giving it up. One can also expect from the landlord the right to sublet, which is the ability to sublease space to a third party or transfer the rights to that space. The tenant also has the right to be flexible in terms of fit out possibilities – it can change as much as is allowed by the building and construction law, securing the right not to restore the surface to its original state.

An external advisor who is able to identify opportunities and negotiate with the building's owner can take care of these rights. Developers operating in Poland know the needs and requirements of tenants in this group and take into account the specificity of their activities in their office projects. Service sector companies rely on very well-connected office projects, but they do not necessarily have to be in the city centre. Of more concern is access to urban transport.

Lease agreements signed by the sector are often characterised by a very large volume of space. Among the largest contracts concluded by companies in this sector, the following are worth mentioning: Shell Business Operations, which leased 27,800 sqm in Krakow, and Samsung, which opened its 21,200 sqm R&D centre in Warsaw Spire. The role of smaller municipalities is growing as locations for BPO and SSC projects. A good example is the lease of 2,500 sqm signed by Deloitte at Skyres Warszawska office complex in Rzeszow, where the company opened its new Business Services Centre.

Moreover, two important trends must be mentioned. The first of the two is the fact that offices have become a recruiting tool, an employer branding instrument, and a bargaining chip in the fight for employees and talent retention. As a consequence, employers nowadays attach importance to office decor and functionality. They realised that nowadays an attractive office that will inspire and enable individual or team work, but where there will also be rest and relaxation zones, is more often as important to employees as their salaries. The other trend is the popular flexible use of offices, high-quality serviced offices equipped with advanced technology and the trend of co-working.

JLL has once again been selected as a strategic partner for ABSL. What does this partnership entail?

We have been cooperating with ABSL, the organisation of companies from the sector of modern business services, since 2011. Together, we promote Poland as an attractive location for BPO and SSC projects as well as support ABSL in contacts with external partners in Poland and throughout Europe. Furthermore, we provide knowledge in the form of the latest research and expert market analyses.

Go to part 2.

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