According to the latest Savills report, in the first half of 2023, the total stock of the Warsaw office market reached 6.25 million sq. m., with a slowly leveling distribution between the central zone and the non-central area.
Three new office buildings were completed during the first six months of the year, the largest of which is The Park 9 (White Star Real Estate, 11,000 sqm). Nearly 250,000 sqm of modern office space is currently under construction. Among others, the first phase of the Towarowa 22 mixed-use complex (Echo Investment, 31,100 sqm) and The Form (Lincoln Property, 28,000 sqm) began construction in 2023.
Projects to be delivered to the market in later years include The Bridge (Ghelamco, 45,000 sqm), the next phase of Studio (Skanska Property Poland, 24,000 sqm) and Upper One (Strabag Real Estate, 35,900 sqm) on the site of the Atrium International building, whose demolition is nearing completion. As a result of the revival of development activity, up to more than 300,000 sq m of new space could be delivered to the market in 2025.
Demand in the first half of this year amounted to just over 325,000 sqm, down 32% compared to the same period last year. New leases generated 57% of the total volume of leased space (43% in 2022). Renegotiations accounted for 35% of the total (39% in 2022), while expansions and pre-leases only accounted for 4% each (8% and 10% in 2022, respectively).
“After a slowdown in developer activity over the past two years, the market is feeling the first signs of an imminent rebound. However, before tenants can once again choose among newly completed projects, we will continue to see numerous renegotiations or relocations to buildings that already exist, but have vacant space of a suitable standard.” –
comments Daniel Czarnecki, head of office space, landlord representation, Savills.
According to Savills data, as of the end of June 2023, the vacancy rate in Warsaw stood at 11.4%, down 0.5 pp year-on-year. Monthly rates in the most prestigious locations of the Centrum zone remained in the range of EUR 22.5-25.5 per sqm per month, and in Służewiec at EUR 13.00-15.00 per sqm per month. However, tenants have to reckon with the rising cost of service charges.
“In line with the increases in maintenance fees predicted last year, we are now seeing in modern office buildings in Warsaw that they have begun to exceed PLN 30.00 per sq. m. per month, and there are also cases of rates above PLN 35.00. Tenants are increasingly deciding to carefully analyze these costs, both in the offices they currently occupy and those they plan to move to, and savings can be achieved as a result.”
adds Krzysztof Sakierski, director of strategic consulting, Savills.
