Why are 14% of downtown offices empty?
Wrocław office buildings have stopped bursting at the seams, and on the windows at Legnicka or Piłsudskiego streets, 'for rent' banners are appearing more and more often. For company owners, this is the best news in years, because empty meters mean that you are the one setting the terms now.
Dark windows of Wrocław office buildings
An evening walk around Plac Grunwaldzki or a visit to the Main Station area is enough to see that lights in offices go out faster than they used to. According to our latest analyses, the real vacancy rate in some older Class B buildings reaches as high as 18.7%. This is not just a problem for developers; it is your bargaining chip. When a building owner sees that 1/5 of their space is not earning, they start talking about contract extensions with current tenants in a completely different way.
Wrocław Advisory Hub monitors the situation in 84 key locations in the city. We see that the process of leasing new space now takes an average of 11 months. No manager wants to risk an office standing empty for a year, so they prefer to lower your rent rate just to keep you for the next 3 years. Frankly speaking, many companies forget about this and sign amendments on old, unfavorable terms because they are afraid of the confusion associated with moving.
An office building owner is more afraid of an empty premises for a year than of lowering your rent by 2 euros per meter.
How to squeeze savings from an amendment?
Most business owners in Wrocław make the same mistake: they wait until the last minute. If your contract ends in 7 months, that is the perfect time to approach the manager. Recently, we helped a logistics company from Fabryczna that occupies 164 square meters. Instead of agreeing to rent indexation by the inflation rate, we negotiated a rate 1.80 euros lower per meter and an additional 2 months without rent as a loyalty bonus.
Straight to the point: on an annual scale, this small company saved over 14,300 PLN. This is money that, instead of going to the wallet of an investment fund from Warsaw or London, stayed in the account of a local entrepreneur. Remember that in Wrocław, competition between buildings is huge right now. New office buildings on Strzegomska St tempt with free parking spaces and modern air conditioning systems, forcing older facilities into drastic price cuts.
The service charge trap
Rent is only the tip of the iceberg. Real money leaks away in the so-called service charge. We reviewed 47 invoices from various managers in Wrocław from the last quarter. In 12 cases, we found errors in energy cost settlements and inflated rates for facility security. Companies often pay for a security guard who watches over the whole block, not just their building, because the costs are 'blurred' across all tenants.
Perhaps your manager raised your fees by 20% explaining it with electricity prices. But did you check if the building has a fixed-term contract for energy? It often turns out that costs can be cut by 3.20 PLN per meter just through a careful audit of invoices. Wrocław Advisory Hub doesn't take anyone's word for it – we ask for hard data and cost specifications from the manager. Often, after such a request, an 'accounting error' is suddenly found in the tenant's favor.
In every third contract in Wrocław, we find errors in service costs that inflate bills by several thousand zlotys a year.
What to do when your contract is ending?
Start with a simple calculation. Count how much you pay today and check advertisements in buildings of a similar standard within a 2-kilometer radius. If you pay 14 euros net and the neighboring office building offers 12.50 euros for new clients, you have a ready argument. Don't be afraid to say directly: 'We are considering moving because the competition gives better terms'. This is not impoliteness; it's pure business. We know Wrocław inside out and we know that every square meter must pay for itself.
It's also worth paying attention to the office layout. Often companies pay for corridors and empty corners they don't use. When extending the contract, you can negotiate a remodel of partition walls at the owner's expense. This is a saving of 22,000 - 38,000 PLN on the renovation alone. If you don't have time for such pushing and pulling, get in touch with us. We count every meter and will check your amendment in 3 working days. Perhaps your 14% savings are lying in the empty office one floor up.
