2015-12-31-莱坊-Costs_and_Service_Charges_in_Office_Properties_2011-2016_16页_5mb

COSTS AND SERVICE CHARGES IN OFFICE PROPERTIES 2011-2016

Overview

• Scope: Analysis of service charges and operating costs in 38 A/A+/B/B+ office properties in Warsaw, Poznan, Cracow, Tricity, and Lodz for the period 2011-2016.

Service Charges

• Definition: Covers operating costs of the property owner. Amount per sqm depends on factors like property location, technical grade, lease area, land ownership forms.
• Key Influences:
  • Location: Highest in Warsaw CBD (higher land ownership charges). Regional cities have lower costs.
  • Building Size: Properties <7000 sqm in Warsaw pay higher perpetual usufruct charges; medium-sized properties outside CBD face higher costs due to parking/security.
• Breakdown:
  • Media: Largest component (~35% in previous period), covering electricity, heating, water etc. Invoiced individually avoidable via collective purchasing.
  • Facility Management: Technical maintenance costs constant in CBD, rising in regions due to staffing issues.
  • Property Management: Proportionally lower (~6%) but dependent on rent trends.
  • Common Areas Cleaning: 3-7% of total building area, higher outside CBD due to more lease modules.
  • Security: Customary to outsource, high costs due to staff requirements.
  • Insurance: Depends on franchise levels, negotiated annually.
  • Property Tax & Perpetual Usufruct: Linked to land value; perpetual usufruct is 3%~7% of land valuation.
  • Other Costs: Highly variable, include repairs, pest control, seasonal services.

Cost Variations by Location

• Warsaw vs Regions:
  • Service charges higher in Warsaw (due to land ownership law and higher property value).
  • Differences evident both across locations (CBD vs outside) and building sizes.

Lease Agreement and Costs

• Methods for tenants to carry costs (media included solely/partially) defined in leases.
• Trends in leases: Limiting service charge increases annually and restricting media costs; rise in tenant audits.

Market Trends (2016-2017)

• Increased Operating Costs: Driven by mandatory minimum wage rise (PLN 13/hr), particularly affecting security (up ~40% YoY), cleaning (up ~15%) and facility services.
• Focus on Efficiency: Growing use of tech solutions to replace staff (CCTV, automation) and environmental initiatives to reduce energy costs in properties.
• Property Tax: Local governments are reducing discretionary rates and intensifying audits, ensuring accurate tax calculations.

Technology's Role

• Implementation of IT and robotics in facility management, security, cleaning and property management is rising from 2017 onward, especially through IoT technology.
• Modern platforms improve communication and reporting, reducing operating costs.

Conclusions and Findings

• Warsaw office costs remain the highest in Poland; regional cities saw lower but still increasing service charges.
• Operating costs dominated by media consumption, facility management and security.
• Labor-related expense trends are forcing greater investment in technology solutions and energy efficiency.
• Property tax remains a key variable depending on local rates and structure.