In an era of mass layoffs in corporations and the normalization of remote work , office space is increasingly unused. In Krakow, one in five office buildings stands empty, and the situation is even worse in Katowice. Is there a recipe for office vacancy?
In the first quarter of 2024, a wave of layoffs swept through Krakow. Jobs were lost mainly to those employed by foreign corporations, and the number of those laid off by a considerable margin exceeded 1,000. As the Krakow media reported, this is more than in the whole of last year, the difference with 2022, in turn, is more than double. The phenomenon from the beginning of the year is part of a broader trend of decreasing employment in the business sector in Poland - there is an increase in labor productivity, which reduces the need for employees, numerous positions are also being transferred to other countries, while only specialized vacancies of medium and high level remain in Poland. The described process will probably be further exacerbated by the development of artificial intelligence, which is already increasingly responsible for the growing automation of the simplest processes, and consequently the reduction of employed personnel.
What comes after the corpo?
What remains after a warm corpo job are memories and acquaintances, a severance package, and...an empty desk in an increasingly empty office building. We have already learned that office buildings are not essential to function during the coronavirus pandemic, when most of those previously working in front of a desk arranged workplaces in their own homes. Although the pandemic is long behind us, and the complete relocation of work under the roofs of private homes involves some organizational constraints, remote work in many corporations is no longer an exotic idea, it has become the norm. In some companies, the square footage of rented office space is smaller than the number of employees who therefore rotate into offices would indicate. In others, on the other hand, there is too much space, and with more and more layoffs, more and more desks remain unused.
What to do with empty office buildings? Panorama of Warsaw from the Siekierowski Bridge
Photo: Qbolewicz | Wikimedia Commons © CC BY-SA 4.0
vacant buildings more and more
Office buildings, on the other hand, continue to increase; demand for modern office buildings is growing, while the older ones are starting to shine empty. The percentage of office vacancies is not decreasing, and in some places is increasing. While Warsaw is experiencing a steady level of unused office space, Krakow, the second-largest concentration of such facilities, has clearly slowed down the market. According to industry reports, in the first quarter of 2024, the share of vacant office space reached nearly 19% in the capital of Malopolska. In Katowice it was as high as 23%. This trend is likely to deepen, as office infrastructure in Poland is relatively new compared to Europe. In Paris, where the share of decades-old office buildings is much higher, as much as 33% of office space has been out of use in the last four years.
What to do with empty office buildings? The post-modern Curtis Plaza will fall victim to the demolition of more office buildings in Warsaw.
Photo: EmptyWords © CC BY-SA 4.0 | Wikimedia Commons
office wasteland
The consequences of this state of affairs range from economic to social to environmental. These seem fairly obvious, but they can take unexpected turns. Last November, the European Central Bank (ECB) issued a stern warning about the state of the commercial real estate sector, while in the United States analysts see this phenomenon as one of the fuses for the next global financial crisis. The constant replacement of older office buildings with new ones with better energy performance, on the other hand, is not the most sustainable solution - it will take decades before the environmental costs of demolishing an old building and erecting a new one are offset by lower energy or water demand.
What to do with empty office buildings: office buildings near the Bareja Roundabout in Krakow.
Photo: Mach240390 | Wikimedia Commons © CC BY 4.0
Above all, however, trepidation is caused by the waste of space, which is difficult to accept in an era of efforts to densify city centers, the housing crisis and rampant real estate prices. Out-of-office complexes are being transformed into dead, socially inactive spaces - the massive business park near the Bareja Roundabout in Krakow, once bursting at the seams at all hours of the day and night, today resembles a dystopian wasteland, where individuals stroll from time to time. Along with corporations, retail and service establishments are moving out of the vicinity of abandoned office buildings, and the number of public transportation connections available in these places is also being reduced. The main sufferers are the residents of the surrounding neighborhoods, which were built when the nearby office complexes were bustling with activity.
What to do with empty offices?
Can the emergence of more wasteland be remedied in some way? There are several solutions. First - build with your head. Deserted business parks are socially inactive chinks in the fabric of the city. Given the dynamic nature of the office space market, this can be remedied by erecting mixed-use developments, where office functions coexist with apartments and retail and service units under one roof. In such a case, even if some of the office premises remain unrented, the entire complex will not turn into a vacancy. The presence of additional infrastructure also ensures that even despite the passage of years, the office premises maintain their attractiveness. Such design is also in line with the idea of the 15-minute city, in which various urban functions occur in short distances.
What to do with empty office buildings? Adaptation to new functions may be a way to develop abandoned office buildings
Photo: James Lee © Unsplash
The second way to deal with empty office buildings is through modernization. Currently, modern, eco-friendly office spaces are in greatest demand. Employers are attempting to draw working-from-home staff back into offices in this way, and there are also issues related to the ESG reporting obligation looming on the horizon. These challenges are most easily met by erecting new buildings, although this is not the only way. Indeed, a significant portion of office buildings are suitable for reuse after a properly executed retrofit. Retrofitting older office buildings seems to be the most sensible move from both an environmental and urban planning perspective, and often also from an economic perspective, as already developed plots of land in city centers are usually cheaper than empty ones. Fortunately, there are more and more examples of this type of development in Poland, including the redevelopment of the University Business Center II office building on Szturmowa Street in Warsaw, designed by the Grupa 5 Architekci studio team, or the modernization of the 1970s-era ZREMB office building on Zegrze Street in Poznań, designed by CDF Architekci.
An apartment in an office building
The most controversial and most difficult to implement idea for office vacant buildings is adaptation to serve new functions. We are mainly talking about the conversion of office buildings into buildings of a residential nature. Such actions seem beneficial from the point of view of the demand for new apartments, which still largely exceeds their supply. However, not all office buildings are suitable for adaptation:
One of the difficulties that can be observed technically is the size of office buildings. Office buildings mostly have open-space areas, which are illuminated by glazing that extends practically the entire height and width of the facade. In the case of separate living quarters, planning should take into account the arrangement possibilities of the rooms, so that they meet the technical conditions for, among other things, adequate daylighting at a ratio of window area to floor area of 1:8. Arrangement changes require a strict and well-thought-out approach, so that the apartment is both functional and adequately lit, " Przemysław Kłopocki of Advision Young analyzed for the inzynierbudownictwa.pl portal.
Design challenges can also be posed by inadequate mechanical ventilation, sanitary and electrical installations, as well as window openings, which in office buildings often lack the ability to open. Fortunately, there is quite a lot of space for new installations in office buildings - according to building law, employee rooms must be higher than for apartments, so the surplus can be used for the above-mentioned improvements. Despite numerous problems, such adaptations are becoming more common in Western Europe, and the first examples are also appearing in Poland - last year we learned that an office building dating from the 1970s at 7a Obrzeżna Street in Warsaw will be converted into a residential building.
What to do with empty office buildings? Lipowy Office Park will be converted into dormitories
Photo: Panek | Wikimedia Commons © CC BY-SA 4.0
Converting office buildings into dormitories, where usually not whole apartments, but rather single rooms are rented,poses slightly fewer problems. Such a project will be implemented in Warsaw's Ochota district, where the Lipowy Office Park, previously used by Pekao, will be converted into a student residence. The need for such spaces was proved by the discussion that arose around the Jagiellonian University's planned sale of the Kamionka student house.
