The total stock of modern office space in the main markets outside the capital, i.e. Kraków, Wrocław, the Tri-City, Katowice, Poznań, Łódź, Lublin and Szczecin, totaled 6.63 million sq. m. at the end of September 2023. According to the latest Savills report “Market in Minutes: the Office Market in Regional Cities,” in three regional cities (Krakow, Wroclaw and the Tri-City) office stock exceeds the level of 1 million sq. m., in another three the stock is between 600 and 750 thousand sq. m. (Katowice, Poznań and Łódź), while in the two smallest markets (Lublin and Szczecin) they do not exceed 225 thousand sq. m.

Since the beginning of the year, 16 new developments have been completed in regional markets, with a total area exceeding 236,000 sqm. The largest new projects completed in 2023 include: Ocean Office Park (building B5 28,600 sqm in Krakow; Cavatina), Craft (26,700 sqm in Katowice, Ghelamco) and Nowy Rynek (building E, 25,100 sqm in Poznan, Skanska).

As of the end of September 2023, nearly 482,000 sqm of modern office space was under construction in major regional cities (down 19% year-on-year in 2022). Nearly 92,000 sqm is scheduled for delivery in the fourth quarter of 2023, and another 227,000 sqm will be delivered in 2024. The largest amount of office space under construction is in Wrocław (121,700 sqm), with Krakow (86,000 sqm) and Katowice (84,200 sqm) being the next markets on the podium.

According to Savills data, nearly 532,000 sqm was leased in regional markets between January and the end of September 2023, representing a 19% increase compared to the same period in 2022. The largest demand was in the IT sector, where tenants leased more than 148,000 sqm. (28% of total demand). Demand generated by the manufacturing sector accounted for a 12% share, while the business services sector accounted for another 11% and the financial sector for 10%. Flexible office space operators leased more than 19,000 sqm, which accounted for 4% of total demand.

“The high interest in leasing offices in regional markets allows us to expect that tenant activity for the whole of 2023 will be close to the highest result recorded so far in 2019. There is a growing trend among tenants to seek to optimize occupied office space through in-depth analysis of occupancy needs during relocation processes. They are looking for downtown offices that guarantee easy access to public transportation. Some companies are choosing to downsize their existing occupied office space, sometimes in favor of a more prestigious office, with more efficient use of space and an arrangement that meets the needs of employees. When choosing an office, tenants are also increasingly guided by the need to meet ESG and EU taxonomy requirements.” –

says Jaroslaw Pilch, director of office space, tenant representation at Savills, who also heads Workthere in Poland.

The low net absorption rate of 76,000 sqm. (down 65% year-on-year), translated into an increase in the vacancy rate in regional cities to 17.3% (up 210 basis points year-on-year) – office space that was available to tenants at the end of September exceeded 1.14 million sq. m. in total in all cities. Comparing this to the same period in 2022, only two cities saw vacancy rates fall – Tri-City (40 basis points year-on-year) to just over 13%, and Lublin (280 basis points year-on-year) below 13%. The highest vacancy rates were recorded in Katowice (over 23%) and Lodz (nearly 23%). Only one city – Szczecin – had a vacancy rate below 10% (5.2%),

The level of office rents in regional cities in most markets remains fairly stable, with a slight correction evident in Krakow, where at the end of September they were between 14 and 16 euros per sq. m. per month, and in Wroclaw, where their level is between 14 and 15.75 euros per sq. m. per month. The lowest rents among regional cities are currently in Lublin, where they are between €10 and €12 per sqm per month.

Download the report here.