At the end of March 2025, office stock in Poland’s largest regional city markets, excluding Warsaw, exceeded that of the capital by approximately half a million square metres - over 6.7 million sqm vs nearly 6.3 million sqm.

The first quarter saw just 2,400 sqm delivered in Poznań, marking the lowest new supply recorded in regional cities since records began. Development activity across Poland’s regional cities remained subdued, with nearly 193,000 sqm under construction at the end of March 2025 - down by almost 13% compared with the fourth quarter of 2024 and almost 73% below the ten-year annual average of approximately 711,000 sqm. 68% of this volume is concentrated in three cities: Kraków, Poznań and Wrocław.

“According to developer reports, just under 70,000 sqm is expected to be added to the Polish regional cities in 2025, making it the lowest annual volumes since 2006. Looking ahead, this downturn in office construction is likely to continue in the coming quarters – largely due to high vacancy rates in existing buildings and tenants’ preference to remain in their current locations”, says Karol Wyka, Executive Board Director, Head of Office Department, Newmark Polska.

By contrast, office demand in the core regional cities remained steady, with nearly 176,900 sqm signed for in the first quarter of 2025. While this represents a decline of almost 20% from the previous quarter, it marks a year-on-year rise of more than 27%. No single transaction exceeded 10,000 sqm, and the average lease size was approximately 1,000 sqm - an increase of nearly 10% compared with the first quarter of 2024.

“Leasing activity in January-March 2025 hit its highest in Kraków, which saw 56,600 sqm of office transactions. The runner-up was Wrocław with over 43,800 sqm signed for, while office take-up in Tricity amounted to almost 26,400 sqm. These three cities accounted for over 72% of the total leasing activity across the regions in the first quarter of the year”, adds Karol Wyka.

Broken down by transaction type, lease renegotiations and renewals have accounted for over 45% of total take-up in the key regional cities since the fourth quarter of 2023. In the first quarter of 2025, their share stood at 47.6%, followed by new leases at 39.6%. The remaining 12.8% was spread across expansions (8.4%), pre-lets (3.0%) and owner-occupier deals (1.4%).

“An increase in expansion activity to nearly 15,000 sqm in the first quarter of 2025 – representing almost 70% of the 22,000 sqm leased for expansions throughout 2024 – is a positive sign for the office market. The sectors that generated the most demand were IT and professional services, which accounted for 18% and 16% of total take-up, respectively. Manufacturing came third with 14%”, says Karol Wyka.

By the end of March 2025, the overall office vacancy rate in the key regional markets had stabilised at a relatively high level of 17.5%. It is, however, expected to edge down in the coming quarters, driven primarily by sluggish development activity and steady occupier demand. The first quarter of 2025 saw a decline in vacancies by 0.3 pp, both quarter-on-quarter and year-on-year. Vacancy rates stood at over 20% in three cities: Łódź, Katowice and Wrocław. Total office availability across Poland’s eight core regional cities reached 1.18 million sqm.

“Prime office rents have held firm at relatively high levels of €16.00-18.00 per sqm per month for several quarters, primarily in buildings with high environmental certification ratings or in prestigious locations. By contrast, office buildings offering lower-quality space or experiencing high vacancy rates tend to command lower rents. Additionally, such stock is sometimes temporarily taken off the market for refurbishment or repurposing, for example, for residential use”, comments Agnieszka Giermakowska, Research & Advisory Director, ESG Lead, Newmark Polska.