2014-12-31-莱坊-Koszty_i_opłaty_eksploatacyjne_w_biurowcach_2015_16页_2mb

Summary of Knight Frank's Polish Commercial Property Operational Cost Report (2015)

Key Areas Covered

The report analyzes operational costs for commercial properties, primarily office buildings, in Poland, focusing on Warsaw and other major cities (Poznań, Wrocław, Kraków, Gdańsk, Łódź).

Property Portfolio and Timeframe

Knight Frank manages 1.3 million m² of commercial property in Poland. The data is based on buildings constructed post-1998 and covers the period 2011-2014.

Rent and Czynsze

• Warsaw Central Business District (COB): base rents ranged from 16-23 EUR/m²/month.
• Other Warsaw districts: base rents ranged from 11-18 EUR/m²/month.
• Regional cities: base rents ranged from 8.5-13 EUR/m²/month in Łódź to 10-16 EUR/m²/month in Poznań and Wrocław.

Operational Costs Definition

Operational costs include expenses necessary for proper functioning and maintenance of the property, such as:
* Taxes (property tax)
* Media consumption (energy, water, gas, waste disposal)
* Cleaning (common areas)
* Facility Management (FM)
* Security
* Property management expenses
* Usage rights fee (ground lease)
* Insurance
* Other recurring and occasional costs

Exclusions

Operational costs exclude expenses for:
* Modernization or upgrades
* Tenant arrangements
* Repairs due to tenant negligence
* Errors or oversights by the owner or manager
* Company administrative costs

Cost Breakdown Components

Common components include property tax, media costs, FM services, security, property management fees, usage rights fees, insurance, cleaning services, and other miscellaneous costs.

Cost Correlation and Dependencies

• Most operational costs correlate directly with the leased/billable area.
• Costs independent of area include the annual ground usage fee and security costs, latter being influenced by property structure and systems used (camera surveillance, access control).
• Land size impacts costs related to land maintenance and property tax rates.

Rent-to-Cost Relationship

Rent is often indirectly negotiated and influenced by operational cost levels to some extent.

Monetary Units and Basis

Costs are given both in EUR/m²/month (quoted) and PLN/m²/month (average net cost) during the analysis period.

Key Cost Categories (by Category, excluding Media)

1. Taxes
2. Facility Management (FM)
3. Security
4. Property Management Fees
5. Usage Fee (Ground Rental)
6. Insurance
7. Cleaning Common Areas
8. Other Costs

Trends

Within Period (2011-2014)

• Media Costs (especially electricity): Highest in the period.
• Property Tax: Steadying or slightly decreasing from 2014 (with a notable decrease in 2014 attributed to favorable purchase terms negotiated by managers).
• Generally lower overall costs compared to 2014.

Outside Period (Projected / Planned)

• Media: Liberty on electricity markets since 2012 allows direct negotiation, potentially leading to price decreases in 2016 and onward for electricity; expected gradual opening for other utilities.
• Security & Cleaning: Upcoming legal changes (effective 2016) regarding employment will likely increase costs by 10-40%, potentially necessitating technical solutions to reduce human presence.
• Facility Management: FM companies are expanding their offerings and seeking qualifications for periodic service provision.
• Property Management: Costs have been decreasing since 2013 due to changes in rental levels and vacancy rates.
• Scale Effect: Larger players are increasingly leveraging scale to negotiate lower prices for energy and utility services.

Company Context and Contact

Knight Frank is an established global property consultancy (London, over 50 countries). Their Polish branch has 24 years of experience, operates in Warsaw and 6 regional offices, offers the full range of property management services, and aims to increase property value and returns for clients. Reports copyright Knight Frank and may not be reproduced without permission.