Poland | Retail Market SHOPPING IN OFFICE BUILDINGS
Q1 2018 Poland | Retail Market
CONTENTS
INTRODUCTION 3
THE WARSAW 4 OFFICE MARKET USERS’ 7 EXPECTATIONS
RETAIL AND SERVICE 11 OUTLETS
AMSTERDAM, FRANKFURT, 18 LONDON… Poland | Retail Market INTRODUCTION
Warsaw’s office market has been developing rapidly since the 1990s – currently, almost 530,000 people work in approximately 500 modern office buildings in the city, spending often more than eight hours a day in them. What retail and service outlets, in terms of both size and quality, are provided to them by office buildings? Is it sufficient, especially given the highly competitive labour market in the capital? Is the list of commercial tenants in office buildings diversified? Which sectors, in addition to catering, are developing in these locations? And finally, is there any one ‘recipe’ for successful retail and services and does this function constitute added value in every case? Colliers International experts studied retail and service outlets in the capital’s office buildings in February and March 2018 and they looked at approximately 300 buildings (all that have commercial premises). We researched location by office zones, the number and size of units, tenants by sectors, vacancy and the level of rents and service fees. A survey, carried out on a sample of approximately 200 employees of Warsaw office buildings in March this year, is an integral part of our report. In the survey, we asked respondents about the quality of the existing retail and service outlets in their workplace and their expectations about them.
The report also includes several examples of investments from Amsterdam, Frankfurt and London that show an innovative approach to complementary functions in office buildings, depending on their location. The report also contains statements from market practitioners. We encourage you to read our latest report.
3 RynekRetail Markethandlowy | SHOPPING | ZAKUPY IN W OFFICEBIUROWCU BUILDINGS | 2018 || 2018Colliers | ColliersInternational International Poland | Retail Market THE WARSAW OFFICE MARKET
Last year, 27 office buildings were completed with a total area of over 275,000 m². At the end of 2017, the largest increase in stock was recorded by the following zones: Mokotów (72,300 m²) where 6 projects were completed, Żwirki i Wigury (62,200 m²) mainly as a result of the completion of the Business Garden office park (54,900 m²), and the City Centre (52,500 m²). The largest buildings completed in 2017 were the second stage of West Station (35,000 m²) on Jerozolimskie avenue, D48 (23,400 m²) in the Mokotów zone (Służewiec), the first buildings of the Generation Park X complex WARSAW OFFICE ZONES (20,100 m²) and the Bobrowiecka 8 project (20,000 m²). Development activity in the office sector in Warsaw is not slowing down. At the end of 2017, nearly 800,000 m2 of office space remained under construction.
Gross demand recorded last year in the capital was at a high level, similar to the previous two years NorthN City Centre (2015-2016). The total transaction volume was 1 E above 820,000 m², which is an increase of 9% CBD East West 4 2 compared to 2016. Office absorption was also high W 5 3 – 341,000 m². Most lease agreements were signed 6 Jerozolimskie Mokotów in the following zones: City Centre (208,500 m²), Corridor US Mokotów (204,500 m²) and CBD (163,800 m²). SW 7 New contracts accounted for over 63% of demand, SE and pre-let transactions almost 18%. Ursynów, Żwirki i Wigury LS Wilanów Corridor Tenants’ interest in office space in Warsaw will continue to be high as the capital continues to attract new companies, and present tenants are Puławska Corridor renegotiating their agreements, often expanding
their space. At the end of the fourth quarter • CBD – Central Business District • Mokotów 2017, the vacancy rate stood at 11.7%, which is • City Centre - (7) Służewiec a decrease of 2.5 p.p. compared to the end of - (1) City Centre North • North 2016. Most space was absorbed in the two central - (2) City Centre East • Puławska Corridor zones, where the decline amounted to 8.2 p.p. This - (3) City Centre South • Ursynów, Wilanów was due to the high level of demand and much - (4) City Centre West • West • East • Żwirki i Wigury Corridor lower new supply than in 2016. • Jerozolimskie Corridor - (5) Upper, (6) Lower
Source: Colliers International, April 2018
4 RynekRetail Markethandlowy | SHOPPING | ZAKUPY IN W OFFICEBIUROWCU BUILDINGS | 2018 || 2018Colliers | ColliersInternational International Basic rents remained stable, with tenants paying will positively affect the demand for office space from EUR 17 to EUR 22/m²/month in the central zone and the quality of developments in the market. and EUR 12 to EUR 16/m²/month outside the centre. A derivative of this trend is an increase and The unemployment rate is low and employers are diversification in retail and service outlets in competing to acquire talented staff. A staff-friendly office buildings, both on the ground floors (cafés, office is now a motivational element for potential restaurants, stores) and on higher (fitness clubs, staff. The trend of changing work space and medical centres, canteens), and lower levels the business environment will strengthen, which (car washes, laundries).
CEDET
5 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International Once a simple canteen „(...) Once a simple canteen - today a well-equipped restaurant or bistro. Once a gray coffee machine with instant coffee - today a café with aromatic coffee and delicious home- made cake. More and more often small boutiques, beauty salons, a beautician, hairdresser, barber, and even a manicurist who are able to refresh our image at an express pace. Today, office buildings are more than just a space where you only work. The new generation of employees brings freshness and energy to companies, but it needs space to develop it. More and more companies are noticing that if they do not provide such a space, they will have problems with acquiring and retaining employees. MICHAŁ ŻELSKI Tenants who use these spaces on a daily basis want to have the same services that the city centre offers them. Therefore, in our office buildings, the ground floors are intended only SENIOR LEASING for services such: kindergartens where we can safely leave children under the professional MANAGER, care, shops in which we will arrange everyday shopping, restaurants where we meet ECHO INVESTMENT with friends, or various service points. According to today’s standards, this is a place for a moment of respite in a relaxed atmosphere, seeking inspiration or settling the mundane needs of everyday life. Employees in modern office buildings are welcomed by a friendly lobby, further invites to an appetizing restaurant, cosy café, energy gym or fitness club. What will be found in the common spaces depends precisely on the tastes of the tenants. We give our employees opportunity to say what they need to feel good in the place where they spend most of their day. We are open to such conversations, because in this way we learn how to respond to changing requirements and social needs. That’s how we gain the trust of our partners (...)”.
Convenience shopping „(...) Carrefour Polska currently has 6 convenience format stores located in office buildings – two in Kraków, three in Warsaw and one in Łódź. Carrefour Express stores have an area of approximately 100 m2, and their range is tailored primarily to the needs of office workers, who are the main customers in these locations. These customers are loyal and they buy what they need in the store during the day. Dairy products, bread and other typical breakfast products as well as ready-to-eat food make up a large proportion of sales. Other popular products are more expensive purchases such as alcohols, chocolates and confectionary RONAN MARTIN, bought as gifts. To more accurately respond to the needs of office workers, the Bistro Express concept is OPERATION also available in our stores, where customers can buy hot dogs, home-made pizza, French DIRECTOR, fries and chicken strips as well as hot drinks. Customers can also heat up ready-made CARREFOUR POLSKA dishes bought in the store or pour boiling water into a soup or porridge, and then eat the meal on the spot using tables in the store.
Shops located in office buildings are also visited by local residents and people passing the store on their way home or to work. Although, they are less frequent customers, their shopping basket is usually bigger. Due to the specificity of the location, these stores have a much lower turnover at weekends, when offices are closed. Therefore, opening hours on Saturdays and Sundays are much shorter, and some stores – such as the Kraków Carrefour Express at Czerwone Maki street – are completely closed (...)”.
6 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International Poland | Retail Market USERS’ EXPECTATIONS
Colliers International experts surveyed nearly 200 employees working in office buildings in Warsaw about their expectations in terms of commercial outlets in their workplaces. We asked what they use most often and what type of shopping they do, how much they spend on everyday shopping and what is missing to satisfy their needs during an eight-hour working day.
In line with predictions, respondents use cafés, newsstands and canteens most often during the working day, followed by restaurants and grocery WHAT IS MISSING IN THE RETAIL AND SERVICE stores. Interestingly, women’s responses were OUTLETS IN THE OFFICE BUILDING WHERE YOU a little different to those of men. Women often use WORK? drugstores and banks during the working day, while men use banks and medical centre. The use of commercial outlets in office buildings also depends on the age of respondents. Cafés and grocery stores are Nothing most often used by younger people, newsstands and Other canteens are used by all age groups and restaurants Lunch bar/ are used by the middle age group. canteen Fitness/gym The products most often bought by respondents during the working day are: sandwiches, lunch, small Pharmacy snacks and coffee or tea. Daily purchases also include Grocery medicines and newspapers, and 5% of respondents Drug store also buy tobacco products. Bakery
The type of daily purchases is illustrated by the Post Oce amount spent – 70% of respondents answered that they spend PLN 11-30 per day on shopping. Medical Centre Hairdresser Only 30% of respondents are satisfied with the Café commercial outlets in their workplaces and they lack nothing. Despite the fairly well-developed catering in Newsstand office buildings, a large group of respondents would ATM like canteens with simple, good quality meals at an affordable price (home-style dinners). A lack of choice 0% 5% 10% 15% 20% 25% 30% and high prices were emphasised.
Source: Colliers International, April 2018
7 RynekRetail Markethandlowy | SHOPPING | ZAKUPY IN W OFFICEBIUROWCU BUILDINGS | 2018 || 2018Colliers | ColliersInternational International WHAT AMOUNT DO YOU SPEND ON EVERYDAY WHAT DO YOU MOST OFTEN USE IN THE OFFICE SHOPPING IN THE OFFICE BUILDING WHERE YOU BUILDING WHERE YOU WORK? WORK?
1% Café Newsstand Lunch bar/canteen 14% 14% Restaurant Grocery
Bakery Pharmacy Drug store Bank below PLN 10 Medical Centre
PLN 11-30 71% Fitness/gym PLN 31-50 Other above PLN 50 Post Oce
Clothing Store Source: Colliers International, April 2018 0% 20% 40% 60%
Source: Colliers International, April 2018
Fitness clubs and grocery stores are often listed among Respondents say that clothing outlets in office buildings expected amenities. Respondents expect a larger range would be also useful in the case of ‘accidents’ and of health and beauty outlets – women need pharmacies unexpected business meetings (for example men’s shirts, and drugstores and men need more services, for ties, tights, umbrellas, etc.). example hairdressers.
Royal Wilanów
8 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International Multi-functional spaces „(...) Business centres are becoming multi-functional spaces and it is only a matter of time before new facilities for new generations of employees will appear. There are already fitness centres, banks, laundries, travel agencies and pharmacies in office buildings. Increasingly, grocery stores, drugstores, clinics, electronics stores, and even fashion boutiques are opening. You can also see a big change in catering. In the office buildings, people will be eating not only in canteens, but also in a la carte restaurants and cosy bistros.
This is a trend that we have been considering in all HB Reavis projects for several years. KAROL WYKA The public areas of the Gdański Business Center, West Station and Postępu 14 create an attractive space also used by employees of neighbouring buildings or local residents. The same will be in Varso – our largest investment in Warsaw. We have designed 8,000 m2 COUNTRY LEASING of commercial space, and a special attraction will be an observation deck, a restaurant and DIRECTOR, bar at the highest part of the complex. HB REAVIS It is especially important to think carefully about commercial space that meets market requirements at the design stage. For example, fitness centres need large premises and restaurants need efficient ventilation and access for suppliers. In turn, medical centres need more complicated water and waste systems, which to introduce in an existing building is always more complicated (...)”.
Cafés in office buildings „(...) A café in an office building has a different character than other city cafés. We have spent a lot of time working on this model – we see a café in an office building as a place to meet and work. Of course, it all depends on what the office building is and where it is, but generally our cafés in office buildings are large and open five days a week (except those that are mixed in nature – office and city functions). Many of these cafés have a second life ADAM RINGER after office hours when they become kind of co-working centres for self-employed people, meeting places for local residents and even places to learn foreign languages. OWNER, GREEN CAFFÉ NERO The first thing we look at is how many people work in a given office building. Empty rooms do not drink coffee. This is a huge risk for a retailer leasing a commercial unit in an office building, especially since deals are often done at the pre-let stage. With multi-stage investments it is difficult to assess in which phase to enter, how much space to rent and on what financial conditions. Office properties are deserted periodically when tenants move out of the building. There are no people on Saturdays and Sundays in office buildings. Therefore, the best are mixed office and city locations (...)”.
9 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International Poland | Retail Market The map shows Warsaw office buildings with commercial and service space. The most of them are located in office zones such as City Centre, Central Business District (CBD), Mokotów, which are office hubs of the capital. However, the largest SHOPPING IN OFFICE BUILDINGS saturation of retail and service space per employee is outside the City Centre and CBD zones - in the Ursynów/ Wilanów zone. TYPICAL TENANT MIX IN OFFICE BUILDINGS BY SECTOR
Grocery discount Drugstore Bank branch Café or fast food Newsstand North
UNUSUAL TENANT MIX IN OFFICE East BUILDINGS
Medical centre/doctors’ surgery Food speciality store CBD Canteen/restaurant Fashion store West Kindergarten City Center
CHAIN TENANTS MOST FREQUENTLY Mokotów APPEARING IN WARSAW Jerozolimskie OFFICE BUILDINGS Corridor
Nowakowski Gorąco Polecam Costa Coffee Żwirki Green Caffé Nero i Wigury InMedio Corridor Żabka
UNUSUAL COMMERCIAL TENANTS Ursynów, IN OFFICE BUILDINGS Wilanów
Tenant Activity Building Puławska 0.1-0.3 0.5-0.8 1.0-1.2 Self-service "carwash" Corridor Wash-dog for dogs Natpoll 0.3-0.5 0.8-1.0 Shooting Shooting range Natpoll Office buildings with Other Praha cinema Cinema Centrum Praha commercial and office service space buildings Pomarańczowa Ciuchcia Kindergarten Adgar Plaza Legenda Kuchnia Spotkań IKEA Showroom/meeting place Pasaż Lipińskiego Współczynnik powierzchni handlowo - usługowej na pracownika 0.1 - 0.3 0.3 - 0.5 10 RynekRetail Markethandlowy | SHOPPING | ZAKUPY IN W OFFICEBIUROWCU BUILDINGS | 2018 || 2018Colliers | ColliersInternational International 0.5 - 0.8 0.8 - 1.0 1.0 - 1.2 Oferta handlowo - usługowa w biurowcach
Pozostałe biurowce istniejące Poland | Retail Market RETAIL AND SERVICE OUTLETS Size and characteristics
According to the results of the study conducted by Colliers International experts in February/ March 2018, as many as 60% of office buildings in Warsaw offer retail and service outlets space – nearly 1,200 units with a total area of 332,000 m². This stock is analysed in this report.
The commercial units are small in most office buildings – 90% of properties have a maximum of 10 units, and 80% have a surface area that doesn’t exceed 2,000 m². The largest retail and service outlets modules are in Plac Unii (office building and THE AMOUNT OF RETAIL AND SERVICE OUTLETS Plac Unii City Shopping), Koszyki (office building SPACE PER EMPLOYEE BY OFFICE ZONE and Hala Koszyki), Royal Wilanów, Millennium Plaza and Europlex. The vast majority of commercial units are on the ground floor (80%), the first floor has about 5%, and levels below and above are used CBD sporadically for commercial purposes. The majority of retail units in office buildings are accessible City Center from the outside (70%); however, nearly 30% are accessible and visible only from inside the building. East
In terms of location, the largest amount of Jerozolimskie commercial space in office buildings can be found in City Centre (Southern and Western), CBD and Mokotów Mokotów – the most attractive and largest office locations of the capital. However, in terms of North square metres per employee, complexes in the
CBD and City Centre and also in Ursynów/Wilanów Puławska offer the most. In the latter zone, office developers
were also targeting the needs of residents in new Ursynów/Wilanów housing estates.
The office buildings with the largest commercial West modules in the CBD zone include LIM Center, Ethos, Rondo 1 and Spektrum Tower. In the City Żwirki i Wigury Centre zone, the largest modules can be found in Pl. Unii, Europlex, Millennium Plaza, Koszyki and 0,0 0,5 1,0 1,5 Swede Center. In Mokotów, commercial space can be found in Mokotów Box, Konstruktorska BC
Source: Colliers International, April 2018
11 RynekRetail Markethandlowy | SHOPPING | ZAKUPY IN W OFFICEBIUROWCU BUILDINGS | 2018 || 2018Colliers | ColliersInternational International and Marynarska BP. In the Ursynów/Wilanów zone, Space availability developers have built space in Royal Wilanów and Wilanów Office Park. The availability of commercial space in Warsaw’s office buildings is average. The market research For this report, Warsaw’s office buildings were carried out by Colliers International experts showed divided based on retail, services and catering. that there were approximately 170 available Six types of office buildings were distinguished: commercial premises with a total area of 42,300 m². complexes on high streets (in the vicinity of The vacancy rate was 13.8%, calculated according intense, natural pedestrian traffic), in the vicinity to the number of premises, and 12.7% calculated of transport hubs, mixed-use facilities (office and according to vacant space. The largest number of shopping centres), office buildings where retail commercial units for rent are in the City Centre, CBD serves employees and residents (in the vicinity of and Mokotów zones, and the fewest are in West, East, large residential complexes), office buildings where Żwirki i Wigury and Puławska. commercial outlets are used mainly by employees and office parks. STRUCTURE OF AVAILABLE RETAIL AND SERVICE OUTLETS IN OFFICE BUILDINGS Developers appreciate the potential of high streets, where as much as 22% of the total commercial space in Warsaw’s office buildings is available. 10% 10% There is also a visible trend to provide employees with a comprehensive range of commercial services 15% in the workplace. As much as 20% of commercial
space is in office parks, and 18% mainly serves 33% the needs of employees. There are not so many mixed-use office and shopping centres in the Warsaw market (9%) – however, the situation is beginning to 32% change, as several such complexes are being built. below 50 m² 50-100 m² THE AMOUNT OF RETAIL AND SERVICE OUTLETS 101-200 m² SPACE BY BUILDING TYPE 201-500 m² above 500 m²
Source: Colliers International, April 2018 5% 9% 22% Most popular are small units of less than 50 m² and 50-100 m². The most difficult to rent are 12% medium-sized units of 101-200 m² and 201-500 m².
In terms of the type of office building, the largest
20% availability of commercial space is on main high 14% streets (47 vacant premises with a total area of over 11,000 m²). In complexes where retail, services and 18% catering mainly serve employees, 36 rental offers for a total area of over 10,000 m2 are available – this may indicate a mismatch between built units and complexes on high streets complexes with retail mainly for employees’ needs the needs of users. The situation is similar in office office parks parks, in which 34 premises with a total area of 2 complexes with retail both for emplyees and residents 8,500 m can be leased. complexes in the vicinity of transport hubs mixed-use complexes (office building and shopping centre) Rental rates and other lease conditions other Rental rates for commercial space vary widely. Source: Colliers International, April 2018 The highest rental rates are achieved by premises
12 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International on the ground floors of the best office buildings on In many buildings, asking rents and lease terms are main high streets (EUR 35-55/m²/month). There are the same as for office space (the use of the area also a few cases where expected rents fluctuate at is optional). For this reason, as in the case of an around EUR 100/m²/month. Rents in office buildings office tenant, a financial analysis of the stability of located in the vicinity of transport hubs are in the a potential tenant is carried out, additional security range of EUR 20-25/m²/month, while in office is required (bank guarantee, deposit or surety) and buildings with commercial space aimed mainly at additional costs resulting from the conversion of employees and local residents – EUR 15-20/m²/ the add-on factor need to be covered. However, there month. are an increasing number of offers for tenants from the retail, service and catering sector that take into Rents of EUR 25-35/m²/month are offered on account the specificity of their business. average for commercial premises in office areas such as CBD, City Centre and Mokotów. In less attractive Commercial offers in office buildings office locations, rental rates are in the range of EUR 15-20 EUR/m²/month. Three groups of tenants can be distinguished in the capital’s office buildings depending on the storey. Exceptions include rates for commercial space on Ground floors are usually rented by catering and retail the ground floor of a modern office building below tenants, underground levels by services (for example EUR 15/m²/month. However, developers sometimes car washes) and above-ground levels by medical design premises for a specific type of business that centres, fitness clubs and canteens. adds value to an investment (for example fitness clubs and medical centres) – in this case, The research carried out by Colliers International the expected rental rate may be below EUR 10. experts confirms that the commercial offers in Warsaw’s office buildings unfortunately is not very RENTAL RATES IN COMMERCIAL diversified. Catering tenants form the largest group PREMISES IN OFFICE BUILDINGS (EUR/M²/MONTH) (both chain and private), followed by financial institutions and services. Sectors such as sport, articles for children, electronics, accessories & jewellery and homeware rarely choose this type of location. However, grocery stores and health & beauty operators (including medical centres) are quite well represented in the office buildings.
10 20 30 40 50 60 Each sector has its own specifics that may favour or hinder operating in office buildings. For example, rents in complexes on high streets tenants in the food industry face problems everyday rents in complexes in the vicinity of transport hubs business operations (for example delivery, sale of rents in complexes with retail mainly for employees’ needs alcohol). On the other hand, tenants from the fashion rents in complexes with retail both for employees and residents sector need other stores in the immediate vicinity. rents in office parks A barrier to catering operators are legal requirements
Source: Colliers International, April 2018 that stop them fitting out units in line with their needs. Medical centres need a specific fit-out and a separate Rental rates also depend on the size and location of the entrance is often necessary. The lack of public parking unit in the building, although the differences are not as in an office building or nearby may also be a barrier. significant as in the case of the location itself. Similarly, service charges depend mainly on the location of the While tenants in the commercial sector add value building – in the central zones these exceed for the owners of office buildings, some retail chains PLN 20/m²/month, and outside the centre they are perceive these locations as a part of their overall PLN 15-17/m²/month. An additional fee for development. There is a group of chain tenants a commercial tenant in an office building is the add-on in the Warsaw’s market, which have entered the factor, which is the share in the common area of the development in office buildings into their strategies. building.
13 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International COMMERCIAL TENANTS IN OFFICE BUILDING The sector of commercial tenants in office buildings BY SECTOR (NUMBER OF UNITS) varies depending on the zone. While in the CBD and City Centre zones there are many tenants from the fashion sector, there are practically no such stores
9% in office buildings in Mokotów, where these needs 2% 3% are largely satisfied by the Galeria Mokotów shopping 3% 33% centre. In turn, the largest number of fitness clubs as 5% well as health & beauty sector are in office buildings
6% in the City Centre zone. However, medical centres are located mainly in City Centre and Mokotów, where 6% apart from office workers they serve residents of new housing estates. 10% 13% 10% The type of office building also affects the sector structure. Complexes on main high streets offer gastronomy fashion the most fashion stores, cafés, restaurants, bank financial institutions multimedia branches and services. In buildings where the entertainment & leisure commercial space serves mainly employees, cafés, health & beauty canteens, bars and newsstands dominate. A wide (including medical centres) homeware range of medical services and homeware stores can services accessories & jewellery be found in locations that serve local residents as grocery other sectors well as employees. A characteristic feature of office Source: Colliers International, April 2018 buildings near transport hubs is the relatively small These include mainly catering and food chains such number of catering concepts. In mixed-use projects as Costa Coffee, Green Caffé Nero, Nowakowski and office parks, the commercial offer is very diverse Gorąco Polecam and Żabka. although on a much larger scale.
Centrum Praskie Koneser
14 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International Newly built commercial space In addition to medical centres, opticians, dental in office buildings surgeries and small specialist clinics will appear in office properties. Office buildings will continue to be The retail map of Warsaw is changing. Shopping interested in fitness chains that open their clubs to centres remain one of its most important elements; external customers, but also those that serve only however, a new trend consisting of increasing the employees of the office building (for example Calypso retail space in new office buildings and mixed-use in Q22). Based on a popular trend in Western Europe, investments can be observed mainly in the city centre. kindergartens will also become more common in office buildings in the capital. Large amounts of retail space in office buildings is a relatively new phenomenon in the Warsaw Catering (both private and chain) and food (grocery commercial real estate market. At the design stage, chains and food specialty stores) operators will developers are increasingly allocating space retail, further develop in these locations. The development services and catering. Examples of investments of international cuisine comes on the back of of this type that are currently under construction a change in consumer habits with people travelling include: Varso, Rotunda Towers, CEDET, Centrum and eating out more often. Specialised food Marszałkowska, The Warsaw Hub, Skyliner and products are also more popular, which are offered, Mennica Legacy Tower. for example, by health food stores such as Organic Farma Zdrowia and stores selling chocolate, alcohol The trend can also be seen in mixed-use projects, and cigars in office buildings. for example the completed Hala Koszyki, or Koneser, EC Powiśle and Browary Warszawskie which are In contrast, for the fashion sector, shopping centres currently under construction. will remain predominant. However, it does not mean that this sector will not develop in office buildings. 2 In total, approximately 40,000 m of commercial space Individual concepts have a chance to exist both is currently being built in Warsaw in nearly 45 office in convenience shopping and exclusive formats, buildings, mostly in the CBD and City Centre zones depending on the type of office building and its (over 70%). location.
In the coming years, the health & beauty sector will Space in office buildings in the best locations will develop most rapidly in office buildings in Warsaw. be rented more often for showrooms – Ferrari uses
Adgar Park West
15 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International a unit in the Banking and Financial Center, while However, many stakeholders need to be involved in Samsung has a showroom in the Postępu 14 office this process, such as: city authorities, developers and building. Showrooms will soon appear in other investors, tenants (current and potential), advisers as prestigious locations, such as in the Ethos building well as non-governmental organisations representing by Trzech Krzyży square. local communities.
The tenant mix in Warsaw’s office buildings is So far, e-commerce is minimally exploiting planned increasingly often at the design stage and the potential of office locations and this will not depends on location, building class and positioning. change in the near future. This is mainly caused by Commercial tenants are very important at the cost of renting space, limited car parking and the pre-let stage of a complex. Increasingly, delivery difficulties. An example of using space developers are aware of the needs of different for e-commerce in a Warsaw office building is the businesses and the need to prepare special offers Perfumesco store in Proximo II. for them (for example canteens need to be located on the ground floors instead of -1 or +1, and medical Interestingly, retail in office buildings will be the least centres need specific fit-outs). affected by the Sunday trading ban that is gradually being implemented in Poland, as shopping in office New office projects with extensive commercial buildings is naturally done only five days a week. modules in the centre of Warsaw are an opportunity for the revival of high streets.
Plac Unii City Shopping
16 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International Run through the functions „(...) We definitely see the trend to merge and penetrate office and retail functions. The tenant mix of commercial space depends primarily on the positioning of the office building and its location, but in general the number of premises of this type is growing on the Warsaw’s market.
The way people work is changing, and co-working concepts are becoming popular. Companies have to fight for the best staff and meet their expectations. Office tenants expect good quality convenience stores (for example we have Organic Farma Zdrowia in Q22), ANNA cafés, restaurants, hair salons, cosmetics stores, drugstores, fitness club, dance schools
DUCHNOWSKA and kindergartens.
SENIOR DIRECTOR, As a result, developers are increasingly allocating ground floors or other floors for INVESCO REAL commercial functions. From Invesco’s point of view, it is important to find good commercial ESTATE solutions by developers as early as at the design stage. Utilities have to match the functionality of the space and the space must be flexible. We believe that over time the understanding of the absorptive capacity and the specificity of this market will grow and the plans of property developers will be improved (...)”.
Polish climate „(...) Having a fashion store, especially an exclusive one, is very good in an office building – parking facilities, additional services and professional building management create a positive synergy. Of course, the location, building class and its surroundings are important. Metropolitan is more than just an office building. We have been here since 2003, and the building has not aged and it is well-known. A luxurious Raffles hotel will open soon in PIOTR KAŁDAN the neighbourhood. However, in Warsaw most retail space is in shopping centres that offer a large selection CHIEF EXECUTIVE under one roof, which is important given the Polish weather. Fashion stores on streets are OFFICER, only effective when they can create a strong and unique shopping destination by what they REDFORD & GRANT offer. Office buildings are not good places for chain stores as they are available in many places and customers can choose the outlet that is most convenient, usually in a shopping centre. However, if it is the only place in a given city, the weather and other factors don’t matter – customers from all over Poland come to us (...)”.
17 Retail Market | SHOPPING IN OFFICE BUILDINGS | 2018 | Colliers International Poland | Retail Market AMSTERDAM, FRANKFURT, LONDON…
Atlas ArenA (Amsterdam, Netherlands) Fitzroy Place (London, United Kingdom)
The Atlas ArenA is a work environment created for Fitzroy Place is a unique complex located in the peoples’ comfort. The office park is in the south- centre of London, combining two new office buildings eastern part of the city, near the intersection of (approximately 7,500 m²), apartments and exclusive highways, the Bijlmer railway station, a stadium, boutiques, stylish cafés and trendy restaurants shopping centre, cinema and concert hall. The total around a newly designed green square. The luxurious office space for lease is over 75,000 m². There is Fitzroy Club operates in the complex, available to a large number of parking spaces, green areas for residents and their guests. Thanks to such a set of walks, sports activities (including a gym), a school, functions, the investment is part of a district where kindergarten, canteens, cafés and restaurants, as life goes on 24 hours a day. The retail and catering well as a laundry and car wash. The complex also outlets at Fitzroy Place are a continuation of what is has a hotel. The park is actively managed and offers available in Mayfair, Marylebone, Oxford Street and employees various types of educational, cultural and Regent Street. sports events.
TaunusTower (Frankfurt, Germany)
TaunusTower is an office building located in the heart of Frankfurt’s banking district, offering 60,000 m² of office space, integrated with neighbouring green areas (a park renovated by the developer with preserved remains of the city walls), shops and catering on the main high streets and an apartment building. In order to meet the needs of the local community, 2,000 m2 of space was made available for a branch of the Museum of Contemporary Art. Apart from office space, TaunusTower offers a canteen, restaurant and a fitness and business club with a conference area.
TaunusTower
18 RynekRetail Markethandlowy | SHOPPING | ZAKUPY IN W OFFICEBIUROWCU BUILDINGS | 2018 || 2018Colliers | ColliersInternational International ACROSS RETAIL: YOUR BUSINESS WITH FULL POTENTIAL
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To achieve success in today’s market, your company needs solutions that use its potential, resources and take advantage of all opportunities. The ACROSS Retail platform provides full access to all services on the real estate market shaped by the needs of a tenant, owner, developer or investor in the retail sector. ACROSS Retail is the sum of our experts’ experience, a tailor-made service package and a dedicated multi-skilled advisory team that understands your business – all available for you in one place. Let us help you untap your potential. 413 offices in CONTACT: Dominika Jędrak Director 69 countries on Research and Consultancy Services +48 666 819 242 6 continents [email protected] United States: Katarzyna Michnikowska 145 Assocciate Director Canada: 28 Research and Consultancy Services +48 607 559 587 Latin America: 23 [email protected] Asia Pacific:86
EMEA: 131 Klaudia Sionek Junior Analyst Research and Consultancy Services +48 666 819 226 [email protected] 2,4 billion € revenue in 2017
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