The first half of 2024 saw evolutionary changes in the Warsaw office market, with activity gradually returning to pre-pandemic levels. By the end of June, 280,000 square meters of office space were under construction. Demand remained steady, with a total take-up of 320,000 square meters, similar to H1 2023, according to a report by Poland’s largest commercial real estate advisory firm.
More than 60,000 square meters of new office space was added to the market in H1 2024. Key completions included Yareal’s Lixa D (9,300 sq m) and Lixa E (16,900 sq m), the renovated Saski Crescent (15,500 sq m) from CA Immo, and a building by Makro Cash and Carry at Jerozolimskie Avenue (6,900 sq m). Ghelamco also completed the first phase of its Vibe project (15,000 sq m) in Q2 2024. Despite these additions, the total office stock increased only marginally by 0.03%, reaching 6.26 million square meters due to repurposing of some existing projects.
Looking ahead, new supply is expected to rise in the coming years. As of June, 280,000 square meters were under construction. Major projects include The Bridge (47,000 sq m) by Ghelamco, Upper One (35,900 sq m) by Strabag, and the modernized V Tower (33,700 sq m) by Cornerstone, as well as Skyliner II (24,000 sq m) by Karimpol.
Emilia Trofimiuk, Research Manager at AXI IMMO, highlighted that developers are aligning their investment strategies with tenant and employee expectations. Over 80% of ongoing office projects are located in central zones, with around 160,000 square meters expected to be completed in 2025. Trofimiuk noted, “Development projects initiated in 2024 are predominantly centered in the heart of Warsaw.”
At the end of H1 2024, the average vacancy rate in Warsaw was 10.9%, indicating stabilization from the previous quarter (-0.1 percentage points) and a year-on-year drop (-0.5 percentage points). The vacancy rate in central office zones continued to decline, standing at 9.1%. However, Służewiec and Żwirki Wigury office zones had higher vacancy rates of 19.6% and 13.5%, respectively.
Jakub Potocki, Associate Director of the Office Department at AXI IMMO, remarked on the impact of generational changes and new working styles on office space organization. He noted that tenants are willing to pay more per square meter for centrally located, well-connected offices while prioritizing space optimization and environmental standards. “Tenants increasingly prefer new projects with ‘Excellent’ level certifications or higher,” Potocki said.
Renewals dominated the leasing activity in H1 2024, accounting for 51% of transactions, compared to 38% for new contracts and 7% for expansions. Consequently, net take-up (excluding renegotiations) dropped by 26% year-on-year. The total take-up of 320,000 square meters was only 2% lower than in H1 2023.
Służewiec led in lease renewals with a 66% share. The most active sectors were banking, manufacturing, business services, and IT. The largest transactions, ranging between 13,000 and 14,000 square meters, were all renewal agreements.
Bartosz Oleksak, Associate Director of the Office Department at AXI IMMO, observed a shift towards smaller transactions due to the prevalence of hybrid working arrangements. “The average transaction size from January to June 2024 was less than 1,000 square meters, with the largest new lease contract at just 4,000 square meters,” Oleksak noted. This contrasts with previous years when large space consolidations, particularly in the banking sector, drove leasing activity.
As of H1 2024, asking rents in prime, centrally located office buildings ranged from EUR 19.50 to EUR 26.50 per square meter per month, while non-central zones started at approximately EUR 10.00 per square meter per month. Rents are expected to remain stable throughout the year. In June 2024, service charges for office space in most modern buildings in Warsaw ranged from PLN 17.00 to PLN 43.50 per square meter per month, continuing their upward trend.
