Polish office market will expand by the end of this year by approx. 210 000 m2 and approx. 240,000 m2 in 2025, and a larger volume of the new supply can be expected after 2026. Cushman & Wakefield estimates. In the first quarter of this year, the size of the completed projects was less than 80,000 m2.
At the end of the first quarter of 2024, the total stock of modern office space on the largest markets in Poland amounted to about 12.95 million m2.
“The total size of the completed projects amounted to less than 80,000 sqm and included projects implemented exclusively in three cities – Warsaw, Wrocław and Krakow. This is a continuation of the limited supply trend visible since the last three years when it comes to the volume of space within new investments. Despite the start of implementation of individual projects during this time, the scale of the area under construction remains at a low level. In regional cities, it is about 225,000 m2, compared to 850,000 m2 before the pandemic,” said Ewa Derlatka-Chilewicz, head of research, Cushman & Wakefield.
The largest projects completed in the first quarter are Quorum Office Park A in Wrocław (18,200 m2 – Cavatina Holding), Lixa E in Warsaw (16,900 m2 – Yareal), the renewal of the Saski Crescent (15,500 m2 – CA Immo) and Krakow’s Brain Park C (13,000 m2 – Echo Investment), C&W listed int eh report.
“According to Cushman & Wakefield’s estimates, the Polish office market will expand by the end of this year by approx. 210 000 m2. A little more surface area – approx. We forecast 240 000 m2, we forecast for 2025, and we can expect a larger volume of the new supply only after 2026,” added Derlatka-Chilewicz.
In total, on the main office markets in Poland, the companies signed lease agreements for almost 280,000 m2. Almost half of the demand in the first quarter of 2024 concerned the capital – more than 139,000 m2 (a decrease of 11% compared to Q1 2015. 2023, on the quantitative range, however, the number of contracts increased by 4%.) The company points out that the activity of tenants in the last 18 months has largely been influenced by the visible trend of optimization and reduction of occupied office space by tenants on the market.
In the first quarter of 2024 in Warsaw, the structure of demand was dominated by new contracts, which constituted approx. 54% of all agreements concluded. The share of renegotiation was at 36%, while expansions amounted to about 10% of all concluded agreements.
“The activity of tenants in regional markets amounted to 140,000 m2, which is a 17% decrease compared to the first quarter of 2023. Between January and March, IT companies also from the manufacturing and service sectors had the greatest impact on demand. The structure of the transaction was slightly different from the Warsaw market, with the predominance of new contracts – 48%, but also a large share of renegotiation – 47% and a lower share of expansion – 5%. A small but positive absorption level indicator is observed on the market, which means that the volume of occupied space continues to increase,” commented Partner, head of regional markets, Cushman & Wakefield Michał Galimski.
The average vacancy rate in Poland at the end of the first quarter was 14.5%, an increase of 0.4 percentage points compared to the fourth quarter of 2023, and an increase of 0.7 percentage points y/y. In the capital, the vacancy rate increased by 0.6 pp compared to the previous quarter and amounted to 11%.
Source: C&W and ISBnews
