Currently, the total stock of modern office space in Warsaw is nearly 6.26 million sqm. In the first half of 2024, the market was enriched by five new buildings with a total area of 63.7 thousand sqm, including Vibe A (15 thousand sqm), completed in the West Center subzone. Total new supply in 2024 could exceed 100 thousand sqm, and is likely to double in 2025, with about 30% of the space coming from upgrades to existing buildings, such as V-Tower and G5 Prime Offices.
Developer activity in the Warsaw market has remained at a fairly moderate but stable level for several quarters. At the end of June 2024, just over 280,000 sqm was under construction, of which almost 60,000 sqm was in office buildings undergoing major modernization. More than 80% of the investments currently under construction are located in central locations, mainly around the Daszyńskiego traffic circle," - says Agnieszka Giermakowska, director of the Market Research and Advisory Department and ESG leader at Newmark Poland.
In the first half of 2024, tenants leased a total of nearly 316,400 sqm, of which 56% (178,400 sqm) in Q2. Demand in April-June 2024 increased by more than 29% compared to Q1, although in the entire six months it was less than 2% lower than in the same period of 2023. In Q2, two leases were signed for more than 10,000 sqm and most deals were made in non-center locations, which accounted for 60% of total year-to-date demand.
Anna Szymanska, director of the Office Space Department at Newmark Polska, adds, "In the first half of the year, renegotiations and renewals (51%) and new agreements (37%) accounted for the largest share of the demand structure. The remaining 12% consisted of expansions (7%), captive transactions (4%) and pre-leases (1%)."
At the end of June 2024, Warsaw's vacancy rate stood at 10.9%, down slightly by 0.1 p.p. from the previous quarter and by 0.5 p.p. year-on-year. These indicators point to a continuation of the trend toward lower vacancy rates, especially in areas outside the center, such as Sluzewiec, where new investments are planned. One example is the purchase of three office buildings of the former Empark Business Park complex by Archicom, which intends to convert the site into the Modern Mokotów residential development.
Rental rates in prime office buildings have remained stable, at €22-27 per sqm in the center and €16-18 per sqm outside the center. Urszula Sobczyk, director of Newmark Polska's Valuation Department, notes, "The highest rents are observed in buildings that meet high technical and environmental standards. The difference in rental rates between the best and less attractive locations is widening."
