How much can we gain from brexit? Will Poland be able to attract the global companies? How do we entice the investors?
According to Walter Herz experts, in the nearest future our office market can gain a lot due to the process related to Great Britain leaving the structures of the European Union. The first effects of the European transformation are already visible in Poland. JP Morgan, one of the largest banks in the world, has decided to move to Atrium Garden office building located at Jana Pawła II Street, by the ONZ roundabout in Warsaw. So far, the financial tycoon has signed a lease contract for 15,5 thousand sq m of offices, but in the near future, it plans to substantially increase the occupied space. Ultimately, the bank intends to employ 3,000 professionals in Warsaw. Moreover, Goldman Sachs and UBS are also looking for employees in Poland.
The fight for the financial sector
According to Walter Herz specialists, the fact that JP Morgan entered our market should encourage other global investors to relocate their offices to Poland. The experts are of the opinion that brexit can bring us new jobs in the branches of many global financial institutions that plan to move from London. The more so because Poland has already consolidated its position of a good location for establishing branches by global banks and financial institutions. Walter Herz analysts believe, that the EU division is an opportunity for us, not only in when it comes to the banking sector, but also the insurance industry.
Specialists note that Poland has great potential for the development of mid-level structures, backed by many years of experience in cooperation with international corporations, including the BPO/SSC sector. An impulse for the foreign investors is undoubtedly an impressive civilization leap in the infrastructure, human resources and quality of life that has taken place in our country over the last decade.
Warsaw with strong competition in Europe
There is a lot at stake. Almost one fifth (230,000) of the 1.3 million employees in the financial sector, are born outside of Great Britain and it is likely that these jobs will be transferred to other countries.
Walter Herz advisors acknowledge that competition in Europe is substantial. It is not easy for the young Warsaw market to fight for global companies with such business centers as Brussels, Frankfurt, Paris or Amsterdam. In the long run, Warsaw will also have to compete with such emerging locations as Budapest or Bucharest.
Experts believe that Frankfurt and Paris, which have a strong position on the continent, compete for the acquisition of advanced business processes, while Warsaw has a chance to reach for the mid-level financial and IT services. However, the capital of France has its downsides, such as high taxes and real estate costs, and labor law that is not very friendly for entrepreneurs. For companies from the financial sector, which Warsaw counts on the most, Frankfurt is more attractive, with such headquarters as European Central Bank. Numerous financial institutions have pre-selected it for the relocation of offices.
Strong advantages of Poland
A strong player in the race for companies transferring EU headquarters from London is also Amsterdam, the advantage of which is affordable real estate prices and an attractive cultural offer. Dublin is also highly valued by investors thanks to its high level of English speakers and favorable tax regulations, whereas Madrid closes the rate.
Warsaw, in turn, can provide low office lease costs, especially in comparison to Frankfurt and Paris, lower wages and lower costs of accommodation and employee retention. In the capital of Poland, one can lease office space a few times cheaper than in London. Especially that its standard, taking into account the exclusive buildings built in the center of Warsaw, is often much higher than the London offices. Experts also point out that the majority of Warsaw office facilities have been built within the last 10-15 years.
In addition, we can boast of highly competent, talented staff, educated in prestigious Polish universities, to whom Western companies have wide access in our country. Also, an important advantage is labor productivity. According to the numbers, over the last decade, by 2016 gross value added (GVA) in the financial sector in Warsaw increased (by 123 per cent) the most among the European capitals. And the GDP growth in recent years (by 34 per cent) gives the capital of Poland the second place in Europe, after Dublin. We also have one of the most favorable tax regulations on the continent.
Warsaw offices are in demand
In addition to great staff, the advantage of the capital of our country are also the fast growing resources of modern office space. Warsaw is falling behind London and Paris when it comes to supply on the office market, but Warsaw agglomeration is already catching up with Athens, Barcelona and Amsterdam.
According to Walter Herz analysts, the capital market currently has 5.3 million sq m of modern office space. Over 800 thousand sq m of offices are under construction, a record number of space in the entire history of the Warsaw market. Many investments are conducted on an unprecedented scale. Therefore, most of the offices in progress will be commissioned in 2019-2020. This increases our chances of transferring foreign investors from London to Warsaw.
Specialists claim that regardless of how many companies we get due to brexit, the demand for Warsaw offices will continue to be very high in the near future. According to Walter Herz, only in the first nine months of the year, almost 600 thousand sq m of office space were leased in Warsaw, slightly less than the average annual demand in the recent years.
Author: Walter Herz
