The results of the worldwide slowdown in the economy can be seen on the office real estate market in Poland. Although the effects are not drastic on the Polish market, the majority of developers change theirs tactics: the big office buildings are suspended for the smaller, with keeping the high standard.

The ‘build to suit’ system - a building developed for one principal investor, is practiced more often. Then it will be easier to get a credit. The banks already toughened the ‘pre-let criteria’ in the last year and because of that, there is a barrier with no way to entry for investors at present; with regard to the situation of higher stock than demand.

In the biggest Polish cities the stock of the modern offices considerably decreased in 2008, as a result of delivering many buildings with a big area. The biggest increases were in Warsaw and Wroclaw, a little bit less in Cracow and the Tri-City- 170 000 m2. According to data by Colliers Int, at present are about 2,5 mln m2 of the modern office surface in Warsaw, 250 000 m2 in Wroclaw, 225 000 m2 in Cracow, 170 000 m2 in
Tri-city, not quite 122 00 m2 in Poznan, 115 000 m2 in Katowice.

That contributed to the increase of empty buildings- to 5,5 in Warsaw; to 5,4% in Wroclaw, what after all still signifies the need for the modern offices. (Data by Colliers Int.) At the same time the tenants were protected from the rents’ raises, that keep at the level of 23 -28 € per m2 in the city center and 16-18 € per m2 outside Warsaw, and 14, 5-18 € per m2 net for a good standard in the other cities, such as Wroclaw, Krakow, Poznan, Tri-City. (Data by WGN Commercial).

The tenants are not interested in high prices and then those offices become the empty buildings. The amount of a standing administrative charge (for using common areas) is added to the basic rate; and which is really various and can rang between 1,5 € and 5 € per 1 m2, depending on the level of the luxury and the building prestige.

In the other big cities, beyond Warsaw, the 4% of the surface is for empty buildings, what is a quite low index, or the stock is balanced by the demand and probably the market is able to absorb the more amount of the office surface in the next years. When the new buildings of high standard are put into use, the offer prices can increase about 1-2 € per m2, but the bigger increase will not be accepted by the potential tenants.

At present, in comparison with the last years, the stock structure has changed- the office buildings of the smaller areas are searched, form 50 m2 to 300 m2.

There is the demand for the high standard, but also the need for the offices in the average standard, together with the area for the small production.
Definitely, the modern establishments are faster found by the investors, but with no inflated rate, with the security, that pleasant for tenants, with the clear company identification when entering, with the sufficient number of parking places, and with the good public transport at the same time.
Looking at the nearest future, it can be expected that the prices will stabilize with the small discounts of the highest rate in Warsaw. The forecasts will be better, if the banks soften the credits’ criteria for commercial property developers.

Investment grounds
From the beginning of 2008 the moderate demand for the grounds for investments among others for hotels and the office buildings in the center of the big cities, and also by the main transit roads. In the cities, that were appointed to the Euro 2012 service, the best are the future grounds of stadiums. There is also the same demand for the grounds for the warehouses and the bigger logistic centers, also with the modern production- good communication with the motorway or the city bypasses, with the planed as well as the functioned sections.

The high prices have the plots with the local plan or with the definite conditions of development (including the study to plan), mains infrastructure (developed), with direct drive of regular shapes.

From 2008 the fall in demand for the housing grounds is observed, however there were offers of that plots for sale by the property developers.
Already in the last year, the offer prices of some plots, firstly inflated, had the fall about 70-80%, and in the case of the more real prices the fall was about 40%. Now the sellers still are unwilling to lower the high offer prices, but are eager to negotiate and give the discounts, that can be between 15-40 %.
Now is the stage for the corrections of prices that were increased in unnatural way during the run years – 2006-2007. The potential investors are not interested in the grounds with inflated prices- having the awareness of the real worth and the actual capitalization level.

Already in the last year the investment ‘for every price’ has finished, and that is why the property owners are willing for the price negotiation.