According to Savills’ latest report, the total stock of modern office space in Warsaw at the end of September 2023 was 6.2 million sqm. The office market in the capital added 20,300 sqm of space, delivered in four new projects, the largest of which is another building in The Park complex (White Star Real Estate, 11,000 sqm).
Nearly 263,000 sqm of modern office space is currently under construction, with as much as 82% of it located in the city center. According to the developers’ plans, 143,000 sqm is to be built by the end of 2024.
“After a systematic decline in developer activity, which lasted from the outbreak of the Covid-19 pandemic in 2020, we are now seeing a gradual reversal of the trend. In 2023, five new office developments were launched in Warsaw. However, some developers are still holding off on launching further projects in anticipation of a higher degree of commercialization of those currently under construction.”
comments Daniel Czarnecki, head of office space, landlord representation, Savills.
Some of the largest office projects to be delivered to the market in 2025-2026 include The Bridge (Ghelamco, 47,000 sqm), Upper One (Strabag Real Estate, 35,500 sqm) and Towarowa 22B (Echo Investment, 31,100 sqm).
Total tenant-generated demand for office space in Warsaw between January and September 2023 amounted to 496,600 sqm, down some 18% compared to the same period last year. Nevertheless, Savills experts observed a gentle increase in demand from quarter to quarter (157,400 sqm in Q1, 165,200 sqm in Q2 and 174,000 sqm in Q3 this year).
New contracts accounted for the largest share of demand (52%). Pre-lease agreements generated almost 7% of total demand, while expansions generated just under 4%. Tenants renegotiated nearly 189,000 sqm, accounting for a 38% share of total demand. This compares with renegotiations of 39%, new leases of 43%, expansions of 8% and pre-leases of 10% for all of 2022.
Flexible office space operators in Warsaw have leased 10,600 sqm in six deals, three of which involved new locations: OmniOffice in the Warsaw UNIT (3,200 sqm) and Grzybowska Park (1,400 sqm) buildings, and Business Link in the Studio B building (3,000 sqm).
According to Savills data, at the end of September 2023, the vacancy rate in Warsaw stood at 10.6%, down 1.5 pct year-on-year. Monthly rates in the most prestigious locations of the Centrum zone remained in the range of EUR 22.5-26 per sqm per month, and in Służewiec at EUR 13.00-15.00 per sqm per month. However, tenants must expect high costs associated with building maintenance fees.
