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To Keep Service Charges Down - Report

The full report

The office market in Poland continues its positive momentum amidst the backdrop of increasing occupier requirements, including lower costs. Cushman & Wakefield, a global real estate services firm, has launched its latest report Occupier Perspective with a thorough analysis of service charges in modern Class A and B office buildings.

Service charges constitute a significant part of office space leasing costs. Utilities account for 28% of service charges, followed by taxes and other fees (24%), and maintenance and running repairs (20%).

Awareness of different types of operating costs making up service charges and a proper understanding of how they are settled are all important to office space lease and use. This is relevant to both the choice of an office building and optimum office design, and helps to negotiate lease terms and to manage a property efficiently.

“When choosing a new office, occupiers should focus in particular on energy-efficient solutions that can make an office building more efficient and consequently help them make real savings on operating costs. They should also insist that lease contracts include an exhaustive list of service charges and specify a cap on the amount of any increase of such charges by a landlord,” said Katarzyna Lipka, Associate Director, Consulting and Research Department, Cushman & Wakefield.

Cushman & Wakefield’s research reveals that service charges may account for up to 20-25% of office space leasing costs. The highest service charges are recorded in office buildings in Warsaw, Krakow, Poznań and Wrocław, and the lowest are in Lublin.

Occupier Perspective is a series of reports constituting a compendium of knowledge for tenants of commercial properties. It provides occupiers of office buildings and shopping centres with updates on key market trends, accurate information and advice that help them organize their daily operations better and negotiate lease contracts with landlords.

“Cushman & Wakefield is a leading property manager in Poland and supports both landlords and occupiers in bringing service charges down whilst promoting good practices and effective and innovative solutions,” said Zuzanna Paciorkiewicz, Ph.D., Director, Business Space Asset Services, Cushman & Wakefield.

Operational costs in the typical lease agreements