But what pitfalls should investors avoid, and what steps should they take to secure the success in Poland?
Poland is the biggest market in CEE which makes it an optimal office choice for further expansion in Central and Eastern Europe. The country itself has many advantages for entrepreneurs – one of the highest GDP growth in the EU (4,5% in 2019 Q2 year-to-year), the largest population (over 38 million) and high internal demand. Due to EU subsidies, the infrastructure is in the process of dynamic development. The network of highways (currently 1,017 miles) and expressways (1,300 miles) is growing every year at a rapid pace. Nearly 46 million passengers travelled via Polish airports in 2018 (up by 15% compared to 2017). The government has also announced its biggest single investment since 1989, the Central Communication Port, the largest transportation hub in the region with close access to Warsaw will cost overr $9 billion and is planned to start operating in 2027. The geographical location of Poland as well as its good connection to the markets of western, northern and eastern Europe (including Russia, Belarus and Ukraine), makes it one of the key logistics hubs on the continent. It may be assumed that its role will continue to rise due to the dynamic development of new EU member states.
Poland combines a highly qualified, hard-working, skilled and able workforce (who have already proved their abilities, reliability, and level of motivation while working for thousands of businesses in the UK) with a reasonable cost of doing business, especially compared to Western European countries. This is why there are already over 1,400 BPO/SSC/IT/R&D centres in Poland (Q1 2019, up 10% year-on-year) of which 80% are international companies (ABSL report). 86 investors who have their shared services centres in Poland are listed on Fortune Global 500.
Office real estate market: high quality for a reasonable price
The office real estate market in Poland is in a very specific moment which creates many opportunities for investors. It is in the process of extremely rapid growth, every year the market brakes new records. There is nearly 5,500,000m2 of office space in Warsaw. Kraków and Wroclaw have already surpassed 1,000,000 m2 mark, whist the Tricity (Gdańsk, Gdynia, Sopot) already offer nearly 800,000m2. The vast majority of office space is located in modern A-class buildings equipped with modern, ecological technologies that fit into corporate sustainable development strategies and produce lower running costs. Polish design studios follow the newest trends and implement the most innovative workplace solutions in their fit-out projects. They create modern, multifunctional, interactive office spaces which become key assets in the context of the recruitment processes, enabling companies to employ and retain the most talented candidates. The cost of office fit-out is much lower than in London or other Western European metropolises.
Leasing rates, compared to the level of the biggest cities in Western Europe, are extremely attractive: the rates of the best office space in Warsaw amounts to approx. €33 per m2 compared to €170-180m2 in London. Due to high demand, the leasing costs in Poland will continuously grow; companies that invest in a long-term lease now will maintain low leasing costs over the next few years. It is a perfect and probably unrepeatable occasion to open a modern, high-quality office in the key CEE market, which would strengthen the image of their business and define their aspirations.
A step forward
In conclusion, Poland creates an opportunity for British companies to start a new branch in one of the most dynamically developing countries in Europe. Poland provides access to the highest quality of infrastructure and office space for a cost which is still far more than reasonable. It is a natural destination for companies that plan their expansion or relocation due to the context of Brexit. According to The Guardian, nearly one in three British firms plan to relocate a part of their business to one of the EU states; Poland seems to be one of the most attractive options. Yet the commercial real estate market and its opportunities keep changing all the time - it is essential to carry out the process with the participation of a trusted partner, who will share local know-how and expertise to assure the best possible relocation conditions.