Covid-19 forces changes in concluded transactions for office space

The COVID-19 pandemic has undoubtedly affected the office property market in Poland. During the crisis, many companies have suspended their decisions regarding expansion or change of office in order to observe the development of the market situation from a safe position. However, those tenants who are just finishing their contracts are forced to make some move, which is why many transactions are still ongoing. Universal quarantine and remote work do not limit these activities, because currently concluded contracts are signed with electronic signatures. In recent weeks we have already participated in several such transactions.

“This and next year, we can certainly expect an increase in the number of renegotiation, which until now accounted for only 33% of lease contracts in Poland. The current situation means that tenants focus mainly on cost optimization, while they perceive any relocation only through the prism of potential savings,” Paweł Skałba, senior partner and director of the Office Space Department at Colliers International, said.

In his opinion, the uncertain circumstances in which we find ourselves mean that tenants will require greater flexibility in terms of contracts for property owners, both in terms of their duration, the possibility of exemption from rent for a certain period, and the amount of space leased. Some companies, now making decisions, will want to keep the possibility of reducing or refining the final size of the object of the lease, because in the future this may translate into real financial savings.