Hanna Żywiecka, Regional Branch in Poznań Hedonic analysis of office and retail rents in the three major cities in Poland Zalesie, 23rd of November 2017
Hedonic analysis of office and retail rents in the three major cities in Poland The specifics of the real estate commercial market survey It has been conducted by 16 regional branches of the National Bank of Poland since 2013 The survey is obligatory for the owners of commercial spaces, intermediaries on the market and companies responsible for renting the resources in office buildings, commercial centres and warehouses. The data collection is made twice a year and concerns ended half of the year. The statistical data basis collected since 2013 only for Poznań contains 12 thousands of records. All data possessed from our respondents are treated as strictly confident, so it can be published only in an aggregate form.
Hedonic analysis of office and retail rents in the three major cities in Poland 3 What is collected in the survey? Transaction and offer rent per square meter related to the size of an individual local, Some details concerning the rent: term of the contract, vacation from paying, possible adaptation of the rent, prices of the whole buildings, in case of latest transactions or putting the building into an offer, capitalisation rate, valuation of the building, some parameters of the building itself, like: the total leasing space, the space unleased, the size of the parking space, the number of floors, the year of finishing the construction of the building, number of shops, share of commercial space in office building etc. We add some additional data like the distance to the centre of the city and age of the building.
Hedonic analysis of office and retail rents in the three major cities in Poland 4 Factors conducive to commercial market development in Poznań Convenient geographic location of Poznań between Berlin and Warsaw; Communication availability of the city (motorway, modernised railway from Poznań to the west border, the significant railway junction, the Airport Ławica); University character of the city, which enables to provide the labour market with the high-class specialists (key factor for BPO and SSC companies, that are main tenants on the office market); Economic potential of the city
Hedonic analysis of office and retail rents in the three major cities in Poland 5 Existing supply of the office space in Poznań Office market in Poznań, with a space amounted to 454 thousand square meters, takes the sixth position in Poland, offering 11% of the total space accessible on the eight main regional markets in Poland. 6 000 000 5 000 000 5 222 400 4 000 000 3 000 000 2 000 000 1 000 000 0 1 057 800 879 600 693 100 460 600 454 100 397 500 170 900 154 100
Hedonic analysis of office and retail rents in the three major cities in Poland 6 800 000 The comparison of lately completed and available to use space and the space in construction 700 000 678 000 600 000 500 000 400 000 300 000 200 000 100 000 0 257 300 260 400 132 900 148 400 98 000 48 200 26 800 38 200 Warszawa Kraków Wrocław Trójmiasto Katowice Poznań Łódź Lublin Szczecin new supply I-III q. 2017 the space in construction
Hedonic analysis of office and retail rents in the three major cities in Poland 7 The vacancy rate 22% 17% 12% 20,20% 7% 2% 12,90% 11,30% 8,50% 8,50% 11,80% 10,10% 6,70% 9,60% -3% Warszawa Kraków Wrocław Trójmiasto Katowice Poznań Łódź Lublin Szczecin Dane Colliers International, Polska Market Insights III q. 2017
Hedonic analysis of office and retail rents in the three major cities in Poland 8 The average rent in office buildings in three analysed cities the average transaction rent in EUR weighted by the size of locals 18 16 14 15,8 12 10 8 13,3 12,0 6 4 2 0 20131 20132 20141 20142 20151 20152 20161 20162 20171 Poznań Gdańsk Warszawa
Hedonic analysis of office and retail rents in the three major cities in Poland 9 The average rent in office buildings in three analyzed cities the average transaction rent in PLN weighted by the size of locals 60 50 40 30 43,6 40,1 46,2 20 10 0 20131 20132 20141 20142 20151 20152 20161 20162 20171 Poznań Gdańsk Warszawa
Hedonic analysis of office and retail rents in the three major cities in Poland 10 The height of rents vs. the building class 60 50 40 54,0 60 50 40 30 30 34,4 20 20 10 13,5 10 12,0 0 20132 20141 20142 20151 20152 20161 20162 20171 0 20132 20141 20142 20151 20152 20161 20162 20171 average rent_a class_eur average rent_a class_pln average rent_class_a_eur average rent_class_b_pln Class A Class B
Hedonic analysis of office and retail rents in the three major cities in Poland 11 Location of the office space The office space is concentrated particularly in the centre of the city.
Hedonic analysis of office and retail rents in the three major cities in Poland 12 The results of the estimation of office space rents in EUR in Poznań Statistical estimation was made by the least square method, 25 observations, coefficient of determination = 50% ln rent sqm. EUR coefficient Standard error Statistical significance ln the distance to the centre 0,0820732 0,0331071 ** ln the age of the building 0,0875951 0,0335437 ** ln leasing space 0,017167 0,0414553 Buildings class B 0,161368 0,0894716 * constant 3,50652 0,473187 ***
13 Statistically significant determinants of the office space rents Warszawa Poznań Trójmiasto Class B -0,268-0,161 Class C -0,405 ln_space to lease 0,065 Number of floors 0,197 ln_age_plus_2-0,033-0,087 ln_parking space ln_distance from the centre -0,107-0,082-0,054 localization Gdańsk-Oliwa 0,150 localization Gdańsk the rest -0,209
Hedonic analysis of office and retail rents in the three major cities in Poland 14 The retail market in Poznań The total retail space in Poznań amounts to 728 thousands square metres*. Commercial centres are in domination, taking 85% of the whole modern supply. There are currently 22 buildings in Poznań agglomeration. *NBP estimations III q. 2017 r.
Hedonic analysis of office and retail rents in the three major cities in Poland 15 The main characteristics of retail market of three chosen cities The biggest in Poland saturation of the retail space in Poznań, which amounts to 888 square metres per 1000 inhabitants. The vacancy rate of trade space in Poznan by the end of June 2017 amounts to 4,5%, for Gdansk 3% and for Warsaw 2,6% The average vacancy rate for 18 big cities in Poland at the end of the third quarter of 2017 amounted to 4,1%* * Colliers data
Hedonic analysis of office and retail rents in the three major cities in Poland 16 The average weighted transaction rate for retail market in EUR 20171 28,75 31,85 38,02 20162 20161 20152 20151 0 10 20 30 40 50 60 average weighted_rent_ EUR_Warszawa average weighted_rent_ EUR_Trójmiasto average weighted_rent_ EUR_Poznań
Hedonic analysis of office and retail rents in the three major cities in Poland 17 The average weighted transaction rate for retail market in PLN 20171 41,31 43,30 55,16 20162 20161 20152 20151 0 10 20 30 40 50 60 70 average weighted_rent_ PLN_Warszawa average weighted_rent_ PLN_Trójmiasto average weighted_rent_ PLN_Poznań
Hedonic analysis of office and retail rents in the three major cities in Poland 18 The results of the estimation of retail space rents in EUR in Poznań Statistical estimation was made by the least square method, 656 observations, coefficient of determination = 54,5% ln rent sqm. EUR coefficient Standard error Statistical significance ln space of the local 0,382686 0,0356806 ln quantity of shops 0,375076 0,0401149 SC_Centrum 0,132408 0,0552929 S.C._furniture 0,351021 0,109501 ln quantity of parking places 0,162222 0,0245902 ln the age of the building_plus2 0,157563 0,0295405 *** *** ** *** *** *** constant 1,84106 0,353092 ***
Hedonic analysis of office and retail rents in the three major cities in Poland 19 Statistically significant determinants of the retail space rents Warszawa Poznań Trójmiasto SC_top 0,686 0,541 SC_local and outlet -0,297 Shopping centres_trójmiasto 0,403 SC_centrum 0,132 SC_furniture -0,351 ln_distance -0,157 ln_local_space -0,400-0,382-0,318 ln_age_plus_2 0,157 0,139 Ln_quantity of parking places 0,162 Ln_exploitation 0,386 Ln_Quantity of shops 0,375
Hedonic analysis of office and retail rents in the three major cities in Poland 20 Thank you for you attention