The office market in Poland has gone through many changes in recent years, with a marked decline in the number of new developments. As REDD’s data shows, the volume of supply under construction is currently still at a much lower level than just a few quarters ago. At the end of 2023, there are 614,000 sq m under development, of which only 179,000 sq m is in Warsaw. The most square metres are expected to be completed in 2024.
REDD data indicates that up to 325 thousand sq m of new office space is expected to be delivered in 2024. A further 193,000 sq m will be delivered in 2025.
In Warsaw, for example, construction has started on the first building in the Towarowa 22 complex – Office House. When completed in 2025, it will offer 31 thousand sq m of space. In Wrocław, on the banks of the Oder River, a modern Quorum complex is under construction with 100 thousand sqm of space for working and living. And in Poznań, the Andersia Silver office building is under construction, which, when completed in 2025, will offer 40,000 sqm of leasable space and will become the tallest building in the city.
Most new office projects are concentrated in the largest markets such as Warsaw, Wrocław and Katowice. However, the volume of supply in the pipeline is currently significantly lower than a few quarters ago. Particularly in Warsaw, where there has been a decline in the amount of office space under construction. At the end of the first half of 2020, it was 653,000 sq m, which exceeded the number of projects for the whole of Poland at the current time.
When analysing the reasons for this decline, real estate experts point to several key factors. The market continued to be affected by the COVID-19 pandemic, the conflict in Ukraine, high interest rates, building material prices, inflation or remote working.
“We observe that a combination of these factors has discouraged developers from starting new projects and also caused delays to existing projects, comments Krzysztof Foks,” Head Of Research, REDD/finne.
Despite these challenges, the industry remains optimistic about the future. – The office market in Poland continues to show strong fundamentals. We expect the pace of new projects to increase again as the economic situation stabilises, adds Krzysztof Foks.
As experts note, the volume of supply in the pipeline is currently at a much lower level than it was just a few quarters ago, which signals an observed change in the dynamics of the office property market. This trend reflects a number of external factors affecting the sector, from global economic challenges to local market specifics.
