Cushman & Wakefield agency has summarised the situation on the Warsaw office market in 2024, a year marked by subdued development activity leading to a gradual decline in office space availability. At the same time, leasing activity remained consistent with 2023’s level. According to Cushman & Wakefield, these trends are likely to continue this year.
Supply: New projects limited to prime locations
According to Cushman & Wakefield, around 105,000 sqm came on stream in Warsaw in 2024 across nine new projects, bringing total stock to 6.3 million sqm at the end of last December.
The largest office completions of the year included Lincoln Properties Company’s The Form (29,400 sqm), Yareal’s Lixa E (16,900 sqm) and the refurbishment of CA Immo’s Saski Crescent (15,500 sqm).
"There are currently over 179,000 sqm under construction across six new projects. Additionally, 2025 is likely to see the start of Ghelamco’s new development - VIBE B. However, the development pipeline and office completions remain well below the levels recorded in 2012-2023. With new projects limited to the city centre, coupled with a shrinking supply of land for office development and strong demand for centrally located sites from residential developers, office availability is likely to decline in the city centre amid rising rental rates. Meanwhile, non-central locations are projected to experience slower growth", says Jan Szulborski, Business Development & Insight Manager, Cushman & Wakefield.
Take-up: Leasing activity remains steady
In 2024, total leasing activity in Warsaw hit just over 740,000 sqm, down by a mere 1 percentage point year-on-year. This stable level of occupier activity can be attributed to the gradual stabilisation of the office rental market and employers adjusting their strategies to current market conditions. Office demand is expected to remain on a par with the levels recorded in the last two years.
The largest transactions of 2024 included Santander Bank Polska’s pre-lease of 24,500 sqm at The Bridge, the renewal of the lease for 13,600 sqm at Varso II by Bank Gospodarstwa Krajowego, and the Vienna Insurance Group’s 11,500 sqm lease renewal at Mistral.
"Another sign of the stabilisation in Warsaw’s office market is the number of leases finalised last year. In 2024, Warsaw saw 757 transactions, marking a decrease of just under 7% year-on-year. The relatively large number of finalised leases highlights the strong liquidity of the office rental market and the steadily weakening trend of office space optimisation observed in 2020-2023", comments Ewa Derlatka-Chilewicz, Head of Research Poland, Cushman & Wakefield.
Vacancy rate: Office availability remains on a downward trend
At the end of 2024, Warsaw’s overall vacancy rate stood at 10.6%, up by 0.2 pp year-on-year but down by 0.1 pp from the third quarter. This equated to approximately 664,000 sqm of unoccupied office space, marking a decrease of around 6,000 sqm compared with the third quarter of 2024.
With new office supply expected to remain constrained in 2025-2027, Warsaw’s vacancy rate is likely to continue its downward trend, enabling the market to absorb surplus office space from existing stock.
Vacancy rates also vary by location. At the end of December 2024, non-central locations reported a vacancy rate of 12.0% - a level consistent with figures seen in 2021-2023. It was well above the city centre’s vacancy rate of 8.8%, which had fallen by 4.2 pp since the end of 2021.
"The projected continued decline in office availability in Warsaw’s central locations is likely to drive rental growth. This trend, coupled with subdued construction activity, is expected to benefit older office buildings and encourage owners to refurbish their properties to enhance their competitiveness in attracting new tenants", adds Vitalii Arkhypenko, Market Analyst, Cushman & Wakefield.
Rents: Rental rates continue to rise in the city centre but remain flat in non-central locations
In 2024, prime office rents in Warsaw stood at €22.00-26.00/sqm/month in the Centre and at €13.50-16.50/sqm/month in non-central locations. Rental rates increased by several per cent primarily in the Centre.
"According to Cushman & Wakefield, projects under construction and prime office buildings in the Centre in particular are expected to experience upward pressure on rents in the coming quarters. In contrast, in non-central locations, vacancy rates are likely to keep rental rates stable", says Piotr Capiga, Deputy Head of Occupier Services, Office Department, Cushman & Wakefield.
