Cushman & Wakefield has summarised the situation in Poland’s largest office markets at the end of 2024. Leasing activity in both Warsaw and regional cities remained at 2023’s levels, while development activity continued to stagnate. By contrast, the capital market experienced a rebound, with the office investment volume rising to €1.64 billion and Warsaw recording a more than threefold increase.
Supply: Development activity remains subdued
At the end of the fourth quarter of 2024, the combined office stock of Poland’s nine largest markets was close to 13.1 million sqm.
"In 2024, total new office supply barely exceeded 228,000 sqm, with most of this space delivered in Warsaw, Wrocław and Katowice. As a result, last year continued the stagnation in development activity, with a significant uptick in office construction completions unlikely before the end of 2026,” comments Ewa Derlatka-Chilewicz, Head of Research Poland, Cushman & Wakefield.
The largest office projects completed last year included Lincoln Property Company’s The Form in Warsaw (29,400 sqm), Cavatina’s Grundmana Office Park A in Katowice (20,700 sqm) and Cavatina’s Quorum Office Park A in Wrocław (18,200 sqm).
"At the end of December 2024, approximately 180,000 sqm was under construction in Warsaw and 160,000 sqm in regional cities, around 80% less than in early 2020. Cushman & Wakefield estimates that Poland’s office market will expand by just 190,000 sqm this year. Looking ahead, this is expected to push vacancy rates down in prime locations across Polish cities", adds Vitalii Arkhypenko, Market Analyst, Cushman & Wakefield.
Take-up: Leasing activity stabilises
"In 2024, total leasing activity in Warsaw reached 740,200 sqm, down by a mere 1 percentage point year-on-year. Meanwhile, the Polish capital recorded 757 lease agreements, representing a decrease of just under 7% year-on-year. This highlights the gradual stabilisation of demand in Warsaw’s office rental market", explains Jan Szulborski, Business Development & Insight Manager, Cushman & Wakefield.
Regional cities also experienced stable demand.
"Total office take-up in regional cities hit nearly 714,000 sqm by the end of December 2024, making a decrease of just 4% compared with 2023, a record-breaking year for regional office markets. Office demand continued to come predominantly from IT companies and the service and manufacturing sectors. Take-up was dominated by renewals which accounted for 51% of the total, while new leases and owner-occupier deals made up 46%, and expansions only 3%", comments Michał Galimski, Partner, Head of Regional Markets, Cushman & Wakefield.
Vacancies: Rates fluctuate
At the end of the fourth quarter of 2024, Poland’s average vacancy rate stood at 14.3%, up by 0.2 pp year-on-ear and compared with the third quarter of 2024. Warsaw’s vacancy rate was 10.6%, a decrease of 0.1 pp from the previous quarter. Regional cities saw mixed trends, with downward movements in vacancy levels recorded in Lublin, Wrocław and Tricity, and upward movements in Katowice, Łódź and Poznań. The average vacancy rate for regional cities was 17.8%. Office availability across all the surveyed markets amounted to 1.87 million sqm, marking a 3% increase year-on-year.
Rents: Rental rates remain largely unchanged but are higher in the city centre
Prime office rents in Warsaw stood at €22-26/sqm/month in the Centre and at €13.50-16.50/sqm/month in non-central locations. Average office rents in central locations in regional cities were €12.50-17.00/sqm/month, with new office projects and buildings in prime locations commanding above-average rental rates.
Investment market: Warsaw sees a strong rebound in office investment
In the final quarter of 2024, Poland’s office investment volume surpassed €633 million, bringing the total for the year to nearly €1.64 billion.
"In 2024, investment into Warsaw’s offices reached €1.34 billion, marking a more than threefold year-on-year increase and just 5% below the five-year average. Regional cities attracted the remaining €298 million. This remarkable performance reflects the strong fundamentals of Poland’s office market, which attracts investors with its high quality, diversified tenant portfolio and compliance of most of its existing office stock with ambitious ESG standards. Investment activity in high- and medium-value transactions continues to be driven by Czech and Swedish investors. However, domestic private capital is also becoming increasingly active, primarily targeting assets in the €5-20 million range", says Marcin Kocerba, Partner, Capital Markets, Cushman & Wakefield Poland.
The fourth quarter of 2024 saw two investment transactions exceeding €100 million each: the sale of the Warsaw Unit office tower to Eastnine for €280 million and P180 to Investika/Bud Holdings for approximately €100 million. Of the 45 transactions recorded in 2024, 26 involved low-value deals under €20 million, accounting for 58% of the total.
Prime office yields in Warsaw stand at 5.75%-6.25% but are expected to face downward pressure due to ongoing market stabilisation and rising investor appetite.
