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BPO/SSC Sector Creates Demand for Office Space

     
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BPO/SSC Sector Creates Demand for Office Space

The lion's share of office space in Poland is leased by companies from the modern business services sector, which is growing at a pace the other industries can only dream of.

Polish office market, which at the turn of the year offered more than 7.5 million square meters of office space is unmatched in Central and Eastern Europe. It thrives in the region, largely due to the sector of modern business services, which is one of the largest tenants in the facilities emerging in Poland.

In regional cities outside Warsaw the companies from this industry have signed contracts for more than half of the offices leased in the previous year, according to the latest ABSL report. According to Walter Herz specialists, investors are hoping for the BPO/SSC sector to remain active and report the demand for office space on the same level as it has been so far. In the ongoing projects in the largest cities in the country there are about 1.5 million square meters of office space waiting for tenants.

One fourth of the offices is occupied by business services sector

Last year, the office market celebrated a big success. It saw the best result in terms of the amount of leased space in its entire history. The tenants received over 1.5 million sq m of offices, over 40 per cent more than a year earlier. More than 370 thousand sq m of rented space outside Warsaw belongs to the companies providing modern business services.

According to the authors of the report, in Cracow and Wrocław where the BPO/SSC sector is developing the fastest, the outsourcing companies have leased over 70 per cent of office space, for which they signed agreements in 2015. The report shows that  last year's demand for offices in Cracow amounted to about 226 thousand sq m, and in Wrocław 127 thousand sq m. This is record-breaking achievement for these markets. Walter Herz analysts point out that the Tri-City also ranks among the cities in which the companies from the modern business services segment settle in. In the first three months of 2016, the sector companies leased more than half of office space that found tenants on the market.

Employment in the BPO/SSC sector is growing by 25 per cent annually

Such great last year's level of lease on the office market would not be possible without the participation of BPO/SSC sector. The analysts believe that the extensive offer and the decreasing rental rates have contributed to the success. Analyzing the data included in the report published by the Association of Business Service Leaders (ABSL), it is not hard to see that the modern business services are one of the fastest growing segments of the Polish economy.

There are 212 thousand  people employed in BPO, SSC, IT, R&D centers. Over the last year, the employment has risen by a quarter. Approximately 177 thousand  people are working in centers with foreign capital, and 35 thousand in the Polish companies. Foreign companies account for over 80 per cent of employment in the sector.

936 business service centers

The forecasts included in the ABSL analysis indicate that by 2020 the employment in the industry is expected to grow to 300 thousand people. There is a big chance for the completion of these expectations, especially since Mateusz Morawiecki declares that the government will support this branch of the Polish economy. Whereas President of the Association of Business Service Leaders confirms that Poland today is just as attractive to foreign investors as it was five or ten years ago.

ABSL data shows that in terms of the number of centers providing modern services for business Cracow is second only to Warsaw; however, in Cracow  the sector employs the biggest number of  people. In 936 service centers operate in Poland, more than two-thirds of which is foreign. The most, 155 centers is located in Warsaw. Among the cities that gather more than 100 centers is also Cracow, Wrocław and the Tri-City.

Over 50 thousand people employed in the centers in Cracow

The undisputed leader in terms of employment in the sector is Cracow, where the service centers employ over 50 thousand people. As a result, the capital of Małopolska region is also the most important center for business services in Central and Eastern Europe. Cracow leads the way when it comes to SSC and BPO centers, and is slightly behind when compared to other metropolitan areas in terms of services in the field of IT and R&D.

Outside Cracow, primarily the owners of office buildings in Warsaw, Wrocław, the Tri-City, Łódź, Katowice and Poznań are fighting for the companies from the modern business services sector. Smaller cities also attract the sector companies. Rzeszów, Szczecin, Lublin, Bydgoszcz and Toruń are also among the locations in which most start-ups service centers operate.  
Support for advanced processes

Foreign investors are lured to our country by well-qualified staff  that stands out in terms of skills and efficiency. Preparation and experience of many people who have been gaining it in the last 10 years of development of the sector in Poland, allow to provide highly advanced outsourcing services and it is in our country where the complex processes are being operated.

New investors are following the success of companies that have long been present in Poland and transfer operations to our country. For us, the development of the sector is primarily the ability to obtain tens of thousands of jobs. Due to the rapid development, the industry strongly stimulates the growth of the office market in our country, creating a demand for hundreds of thousands of square meters of office space.

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