SUPPLY AND PROJECTS UNDER CONSTRUCTION

By the end of 2024, the total stock of modern office space in regional cities reached 6.78 million sq m, representing a year-on-year increase of 2%. The largest markets remain Kraków (1.83 million sq m), Wrocław (1.38 million sq m), and the Tricity (1.07 million sq m). However, both the volume of space under construction and new supply declined—by 41% and 56% respectively compared with 2023. Among new projects exceeding 10,000 sq m were Grundmanna Office Park A in Katowice (20,700 sq m), Quorum Office Park A in Wrocław (18,200 sq m), B10 in Wrocław (14,100 sq m), and Brain Park C in Kraków (13,000 sq m).

The dynamic growth of Kraków and Poznań, where 57,500 sqm and 52,600 sqm are under construction, respectively, testifies to the still strong interest in office investments in regional markets. New office buildings are also under construction in Wrocław – 28,600 sqm, Tri-City – 22,700 sqm, Katowice – 15,600 sqm and Lublin – 13,000 sqm.

– Modern spaces are increasingly incorporating technologies that increase energy efficiency and occupant comfort. New developments are being designed with sustainability in mind, and environmental certifications such as LEED and BREEAM are standard on the market. They are cared for by investors and developers, expected by tenants –

comments Daniel Czarnecki, Head of Landlord Representation, Office Agency, Savills.

TENANT ACTIVITY AND NEW OPPORTUNITIES

Despite challenging market conditions, 2024 ended with a solid result of 714,000. sq. m. of leased space, confirming strong demand for offices. The largest number of tenants represented the IT (27% of leased space), business services (16%), industrial (14%), and finance (12%) industries.

The highest demand was recorded in Krakow (266.7 thousand sqm), Wroclaw (146.5 thousand sqm) and the Tri-City (116.3 thousand sqm), with Krakow and Lodz standing out among other markets with a 33% and 9% year-on-year increase in tenant activity, while Szczecin, Lublin and the Tri-City had the lowest vacancy rates; 7.7%, 11.6% and 12.5%, respectively.

Against the backdrop of a rising vacancy rate of 17.8% in 2024, it is worth noting the growing role of contract renegotiations, which accounted for 51% of all transactions.

DYNAMIC DEVELOPMENT OF THE FLEXIBLE OFFICE MARKET

2024 has brought significant growth to the flexible office space market. The largest amount of office space has been leased by The Shire – Beyond Coworking, which will occupy 4,500 sq. m. in two locations, but concepts created by office building owners are also having a significant impact on the growth of this format.

– We have consistently seen high activity from operators of flexible coworking spaces, who, due to the increasing popularity of hybrid forms of work, have leased a total of 24,500 sqm of space, 25% more than a year ago. The upward trend confirms the growing interest in flexible forms of work and adaptation of space to the changing needs of tenants –

adds Jarosław Pilch.

At the end of the year, 104 flex locations with a total area of 181,300 sqm were operating in regional cities, offering around 22,300 workstations. The largest markets – Kraków (60,000 sqm) and Wrocław (42,000 sqm) – accounted for 56% of the stock. An additional 12,000 sqm will be made available in 2025.

Regional cities offer great diversity – the average flex office space exceeds 1,700 sqm, and the largest location, Fabryczna Flex in Krakow, occupies as much as 9,000 sqm.

TRENDS SHAPING THE MARKET

The market is witnessing a dynamic development of trends in office space design. Companies are increasingly investing in offices conducive to teamwork, offering relaxation zones, green terraces and advanced technological solutions such as intelligent building management systems. There is also growing interest in locations close to major transportation hubs, which promotes comfort for employees commuting to the office.

Another important trend is increased environmental awareness. More and more companies are looking for eco-certified offices, which is in line with ESG strategies. Modern buildings offer efficient energy management systems, solutions to reduce water consumption and green technologies to improve indoor air quality.

STABLE LEASE TERMS AND OPTIMISTIC FORECASTS

Rents in the regions remained between EUR 12 and EUR 17/sqm per month, making the Polish office market attractive to both domestic and international companies.

– In 2025, the market can be expected to continue to stabilize and tenant activity will gradually increase. Companies are increasingly willing to invest in modern office solutions, and the growing popularity of flexible spaces indicates the future directions of the sector’s development. –

adds Jarosław Pilch.

In the coming years, it will be crucial to adapt the offer to the changing expectations of tenants, which will certainly contribute to further strengthening of the Polish office market. The development of the sector will depend on a flexible approach to the changing needs of companies, the implementation of new technologies and attention to sustainability. Poland remains an attractive place for office investments, and an innovative approach to space design will further strengthen its position in the European commercial real estate market.

COMMENTS FROM REGIONAL MARKETS

Wojciech Mazur, Office Agency, Savills

– Cracow

The segment of offices up to 500 sqm has seen the most interest, confirming companies’ cautious approach to long-term commitments. Large transactions – above 1,000 sq. m. – appear less frequently and mainly involve central locations. Demand continues to be driven by the IT and business services sectors, with many companies renegotiating contracts, reducing the number of occupied positions. Flexible coworking spaces are also growing in popularity and gaining ground across the city.

– Katowice

In Katowice, companies are primarily reorganizing existing offices, less frequently opting for relocations. The hybrid model still dominates, but the return of employees to stationary work is becoming more apparent. This translates into a growing interest in improving the quality of occupied space, while optimizing costs. Some companies are reducing square footage, but investing in more modern solutions. In the center, demand for larger offices remains stable, while other locations are dominated by renegotiations and adapting contracts to current needs.

Dorota Kościelniak, Office Agency, Savills

– Wroclaw

The Wrocław office market is now clearly focused on optimizing lease costs. Although a large number of deals were made in 2024, only about 40% involved relocations, and the highest activity is observed in the sub-500 sqm segment. Interest in smaller, more functional offices continues to grow, while large deals – above 1,000 sqm. – are in the minority and mainly concern the inner city.

More than 65% of office demand is generated by IT, BPO and manufacturing companies. Renegotiations of leases, often involving the reduction of leased space, still account for a significant portion of transactions. We expect 2025 to bring stability, and with a redefinition of the hybrid work model and a greater willingness of companies to return to offices, there may be a gentle recovery and expansion in the market.

Piotr Skuza, Office Agency, Savills

– Tricity

The year 2024 in the Tri-City office market saw a marked decline in new supply, with around 20,000 sqm completed, more than 10,000 sqm less than the previous year. The most important completed investments are the second phase of Waterfront in Gdynia (14,500 sqm) and Silk in Gdansk (5,000 sqm). Under construction remain Punkt, Alzare Office and the next phase of LPP Fashion Lab – Velvet, among others.

Although the vacancy rate in the region as a whole declined to 12.5% (from 13.3% in 2023), in Gdynia it rose to a record 21.8%. The main reason for this high level was both the debut of Waterfront II and reductions in leased space by companies. Total tenant activity reached 116,300 sqm, half of which were extensions of existing leases.

The market is sustaining the trend of reducing leased space, driven primarily by the hybrid working model. In 2024, the average deal size dropped to less than 1,100 sqm. (in 2023 it was nearly 1,400 sq. m.), and 58% of new deals were for the smallest offices up to 500 sq. m. Deals above 2,000 sqm, by contrast, were few. Findings from the past few quarters suggest that tenants – faced with changes in workflow – are looking for flexible solutions and carefully tailored space. This trend is expected to continue in the near term, supporting the development of diversified office formats and services tailored to companies’ needs.

Mateusz Jakubowicz, Office Agency, Savills

— Poznań

The year 2024 saw almost zero new supply in Poznan’s office market; only a small intimate building was completed. The situation will be similar this year, with only two smaller projects with a total of 5,000 sqm under construction. As a result, tenants, looking for more attractive locations, are choosing among the best existing facilities. The most popular buildings were Nowy Rynek, Andersia Tower and Pixel, from which Allegro moved out after a dozen years.

Rising fit-out costs (space arrangement) and pressure to optimize expenses often prompt companies to move from older buildings to new ones while reducing occupied space by as much as 20-50%. Due to the small number of new developments, however, some tenants prefer to renegotiate their contracts temporarily, postponing the office change until the market offers more choice. This benefits office building owners, who invest in upgrading installations, refreshing common areas or improving ESG standards.

Working in a hybrid model further encourages smaller-scale transactions (less than 1,000 sqm), while also contributing to the growth of rents, which have remained stable for a long time. In new projects that may come on the market in 2-3 years, rates will reach as high as EUR 18 and more. High tenant interest with limited supply translates into one of the lowest vacancy rates among regional cities, which further strengthens the attractiveness of Poznań’s office market.

Full version of the report: Regional Office Market