INCREASED DEMAND AND GROWING INTEREST IN KEY LOCATIONS

At the end of March, the total supply of modern office space in the capital amounted to 6.27 million sq m, with almost half concentrated in central locations – including 1.01 million sq m in the Central Business District (CBD). It is precisely the central areas that remain the main point of tenant activity. They account for nearly 101,000 sq m of the total transaction volume of over 160,500 sq m. Tenant activity in Warsaw was 16% higher compared to the first quarter of 2024.

Low new supply also affected the level of net absorption, which despite more than doubling compared to the same quarter of the previous year, reached only 12,200 sq m, or 1/3 of the average net absorption from the first quarters of 2020-2024.

In the demand structure, new lease agreements dominate with a 61% share, while renegotiations recorded a significant drop from 36% in Q1 2024 to 25% currently, which indicates a positive market situation and signals that overall demand for office space this year may reach a satisfactory level. Expansion agreements and pre-leases had shares of 9% and 5% respectively.

CENTRAL LOCATIONS WITH LOW VACANCY RATES

The vacancy rate in all of Warsaw decreased to 10.5%, while in central office locations it fell to 7.4%. For comparison, outside the center it was 13.0%. With no new supply and a decreasing number of square meters under construction (212,000 sq m, which is 27% less y/y), the quality and location of office buildings are gaining increasing importance. As much as 93% of newly constructed offices are being developed precisely in central districts with convenient access to public transport and space of the highest standard.

Among the largest investments that will supply the market in the coming years are The Bridge (Ghelamco, 52,000 sq m, opening in the coming months), Upper One (Strabag, 35,000 sq m, planned opening in Q4 2026) and Office House (Echo Investment, 31,000 sq m, planned opening in Q2 2025).

– We estimate that in an optimistic scenario, by the end of 2027, the capital’s market will be supplied with approximately 340,000 sq. m. offices. The pace at which new supply will be delivered will be influenced by several factors, among which project financing security and the degree of pre-lease agreements will play an important role –

mówi Daniel Czarnecki, Head of Landlord Representation, Savills.

Rents in prestigious office buildings in the center remain at the level of EUR 22.50–26.00/sq m/month, with rental costs for the best properties potentially exceeding EUR 27/sq m/month. In the Służewiec area, rates remain competitive and range from EUR 13.25 to 15.00/sq m/month. In the context of decreasing availability of high-class offices and limited new supply, pressure for rent increases is anticipated.

– Although the beginning of the year brought caution in implementing new projects, this very moment creates space for redefining the approach to office functions. We observe growing interest in spaces that not only meet companies’ operational needs but also support organizational culture and team engagement building. Flexible office spaces such as flex and comfortable coworking spaces are becoming popular, meeting the requirements of new generations of workers. In the coming quarters, those who can combine location with the ability to adapt to new trends will gain an advantage –

 komentuje Jarosław Pilch, Head of Tenant Representation, Savills.

LIMITED SUPPLY, BUT WITH QUALITY-FOCUSED PROJECTS

Although the market still faces challenges such as limited developer activity and rising tenant expectations, data from the first quarter indicates progressive stabilization. Supply rationalization, gradual decline in vacancy rates, and strong interest in the best locations and high standards are symptoms that may positively impact the office sector in the coming months.

Download report: Warsaw Office Report Q1 2025