ARTICLES LABELLED WITH TAG regional cities

Interest in leasing offices in Poland is growing. In the third quarter, both in Warsaw and on the regional markets, the demand for office space was the highest this year. In the regions, 2023 will close with a result similar to the record from 2019. 

New office supply reached nearly 236,000 sqm in Poland’s key regional cities in Q1-Q3 2023, says Savills. Gross take-up for the same period amounted to over 531,000 sqm, an increase of 19% year-on-year.

According to the newest report by Newmark Polska, in the third quarter of 2023, office take-up in Poland’s regional city office markets reached nearly 200,000 sqm, while the development pipeline was below 400,000 sqm. High vacancy rates in existing office buildings mean that tenants have a wide choice of options. Both developers and tenants remain focused on ESG, functionality, flexibility and optimisation of office usage and lease costs.

Total demand for office space on regional markets in the first half of the year was similar to last year’s level, but there were more vacant offices in all major markets, except Warsaw. Warsaw recorded a 30 percent decrease in demand for offices, and yet the vacancy rate decreased. Only a few office projects are being implemented across Poland, says Walter Herz. 

According to a report published by Newmark Polska, occupier activity in Poland’s regional city office markets remains stable, but tenants are increasingly shifting their focus towards making efficient use of office space and looking for better quality offices.

There are more and more vacant office spaces on the regional markets in Poland. In Warsaw, despite the decline in demand, the availability of offices is getting smaller, says Walter Herz. 

The Polish Chamber of Commercial Real Estate (PINK) has published figures summarizing office market in eight major regional markets in Poland (Kraków, Wrocław, the Tri-City, Katowice, Poznań, Łódź, Lublin, Szczecin) for Q2 2023. The data is sourced from advisory companies from the commercial real estate sector (Axi Immo, BNP Paribas Real Estate, CBRE, Colliers, Cushman & Wakefield, JLL, Knight Frank, Newmark Polska, Savills) and includes information on existing modern office stock, new completions, take-up volumes and vacancy rates.

Despite the COVID-19 pandemic and the introduction of hybrid working, the office market in Sofia has been developing extensively in recent years. Demand continues to increase, mainly due to IT and outsourcing sector representatives, and supply still cannot fully meet it. However, property developers in regional markets are still exercising caution when initiating new investments. These are some of the main conclusions of Colliers' latest report on offices in regional cities in Bulgaria.

Cushman & Wakefield has summarized the first quarter of 2023 and trends shaping the Polish office market. While development activity in the core office locations continues to slow, occupier demand appears to be recovering, particularly in regional cities. Prime office rents in central locations are, however, on an upward trajectory.

New office supply in the first three months of 2023 totalled 68,100 sqm and was delivered in three cities only: Kraków, Wrocław and Tricity. According to Savills, at the end of March, over 1 million sqm of office space was vacant, equating to an average vacancy rate of close to 16%.