PL

Poland Low new supply, rising occupier activity

Office & mixed-use development
The volume of vacant office space in Warsaw is shrinking as the number of office buildings under construction and delivered to the market is low and occupier demand remains stable, reveals BNP Real Estate Poland in its quarterly report “At a Glance – Warsaw Office Market Q4 2023”

At the end of last year, Warsaw’s total office stock stood at 6.2 mln sqm, of which just 61,000 sqm was delivered in 2023 – the lowest annual figure for new supply in the last five years and well below the five-year average of around 220,000 sqm. This shows that Warsaw is experiencing supply constraints. The Q4 of 2023 saw 40,600 sqm of new office space delivered through two projects only: Lakeside in Mokotów and Studio B in City Centre West.

2024 is shaping up to be another year with significantly lower new supply levels not only in the capital, but also in regional cities. Due to economic slowdown, protracted decision-making processes, tenants’ focus on cost cutting, and high development costs, many developers have revised their investment plans for 2024-2025.
Małgorzata Fibakiewicz, head of office agency, BNP Paribas Real Estate Poland

Demand for office space improved in 2023, reveals the report. Last year’s office take-up reached nearly 750,000 sqm, which was lower than in the peak year of 2022 but well above the pre-pandemic level seen in 2020-2021. Of that total, more than 255,600 sqm was leased in the period October-December 2023. Occupiers’ interest focused mostly on the City Centre, the Central Business District and Służewiec.
Lease renewals accounted for the largest share of take-up at 49.3 pct of the total as tenants would rather avoid having to spend much on relocations and adaptation of space to their needs. New office leases made up 43.2 pct of the leasing volume recorded in Warsaw during the fourth quarter. The largest transactions of the three months to December 2023 were the renewal of GDDKiA’s lease of 12,900 sqm in Green Corner B, Lux Med’s pre-let for 12,000 sqm in Lakeside, and Lionbridge Poland renewing and expanding its lease to 7,300 sqm in Astrum Business Park I. Occupier activity on the Warsaw office market is expected to remain stable in the coming quarters.

As of the end of Q4 2023, there was 238,000 sqm of office development underway. While only one new project (Studio A) was announced in the last quarter of 2023, the first quarter of 2024 will, in turn, see construction works begin in two more office buildings: Vena and the second phase of Skyliner. As a result, office availability in Warsaw is shrinking, especially in central locations, which is also reflected in office vacancy levels. At the end of Q4, unoccupied office space accounted for 10.4 pct of Warsaw’s total office stock, down by 0.2 pp over the quarter and 1.2 pp year-on-year. The office vacancy rate in the capital is expected to continue to trend downwards.

Although development activity has recently picked up, new supply is still failing to keep pace with demand for office space in Warsaw. This is due to several factors. Firstly, the constrained new supply in 2023, which was caused by economic uncertainty, and secondly – last year’s relatively strong occupier activity. Another factor is the maturity of the market as older office buildings are being gradually put out of use.
Klaudia Okoń, senior consultant, business intelligence hub & consultancy, BNP Paribas Real Estate Poland

The BNP Paribas Real Estate report notes that office landlords are likely to come under growing pressure to raise rental rates in 2024, particularly in the case of projects under construction. In 2023, prime office rents remained largely unchanged from the end of 2022 – they stood at EUR 22-26/sqm/month in the Centre and at EUR 13.50-16.50/sqm/month in non-central locations.

The Polish commercial property market will soon be swept by a wave of refurbishments as approximately 70 pct of buildings in Poland are energy inefficient. There is also a growing focus among tenants on sustainable offices. In Warsaw, there are already three office buildings undergoing refurbishment: Warta Tower, Saski Crescent and University Business Center II.

Refurbishment and repurposing works are now required to adapt buildings to ever-rising ESG standards. This trend can be seen in Poland and beyond as more than three quarters of office stock may be at risk of obsolescence by 2030. Gradual improvement of energy efficiency is one of the biggest challenges facing the commercial real estate sector, which has been mandated by the EU to reduce energy consumption and greenhouse gas emissions as part of its efforts to achieve net zero by 2050.
Dorota Mielke, associate director, office agency, BNP Paribas Real Estate Poland

An environmental focus is at the heart of new projects. Warsaw will soon gain its first office building with wooden structure. The four-storey building will be part of the Poleczki Park office complex in the Wyczółki area in Warsaw and its eco-friendly solutions will help reduce energy consumption.

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Office & mixed-use development

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schedule 04 March 2024
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The Park Warsaw gained new tenants during Q3 and Q4 2023 and renewed contracts with existing partners. The office campus, which is managed by White Star Real Estate, is currently 90 pct leased.

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schedule 04 March 2024
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schedule 04 March 2024
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schedule 04 March 2024
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Office & mixed-use development

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schedule 04 March 2024
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schedule 01 March 2024
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Office & mixed-use development

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schedule 29 February 2024
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schedule 29 February 2024
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Office & mixed-use development

Poland Develia changes its office in Wrocław

schedule 29 February 2024
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schedule 29 February 2024
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Office & mixed-use development

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schedule 29 February 2024
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schedule 29 February 2024
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Office & mixed-use development

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schedule 28 February 2024
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Societe Generale Branch in Poland and SG Equipment Leasing Poland, companies belonging to the French financial group Societe Generale, are moving into the Studio complex in Warsaw, which is being developed by Skanska.

Office & mixed-use development

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schedule 28 February 2024
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Office & mixed-use development

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schedule 28 February 2024
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schedule 27 February 2024
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schedule 27 February 2024
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schedule 27 February 2024
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schedule 04 March 2024

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The Park Warsaw gained new tenants during Q3 and Q4 2023 and renewed contracts with existing partners. The office campus, which is managed by White Star Real Estate, is currently 90 pct leased.

schedule 04 March 2024

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MSC Poland, which represents MSC Mediterranean Shipping Company, has leased 1,545 sqm of office space in Gdynia Waterfront. The tenant will move into its new office in Q4 2024.

schedule 04 March 2024

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schedule 29 February 2024

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schedule 29 February 2024

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schedule 29 February 2024

Lixa D has new tenant

A fintech company has leased almost 2,600 sqm of office space in the Lixa D building, which is under construction near Rondo Daszyńskiego in Warsaw. The new tenant will occupy more than 25 pct of the commercial space available in the building.

schedule 28 February 2024

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schedule 28 February 2024

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schedule 28 February 2024

Saski Crescent Half leased

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schedule 27 February 2024

Two new leases signed at Bonarka for Business

Two new contracts for the lease of office space in the Bonarka for Business complex in Kraków have been signed. A total of 825 sqm of space has been leased.

schedule 22 February 2024

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schedule 22 February 2024

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schedule 21 February 2024

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schedule 15 February 2024

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CTP has signed a lease agreement with PKV Build, a leading player in energy consulting, for 3,000 sqm of new office space which is currently being built by CTP at its premium Vlněna office complex in Brno.

schedule 15 February 2024

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schedule 14 February 2024

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schedule 14 February 2024

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schedule 13 February 2024

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schedule 12 February 2024

Office take-up hits a record high

According to “Office Occupier – Office Market in Regions”, a report published by Newmark Polska, total office take-up in 2023 in the largest Polish regional cities surpassed 741,300 sqm - an increase of almost 19 pct year-on-year and 7 pct from the pre-pandemic 2019 peak. Issues related to ESG, functionality improvements, efficient office space management and optimisation of lease costs have filtered through into the vocabulary and strategies of tenants and developers alike.

schedule 12 February 2024

High voltage in B4B

Enetecs – Engineering Technologies has signed a lease contract for 560 sqm of office space in Building F of Bonarka for Business complex in Kraków. The new tenant is an engineering design office specializing in electrical, I&C, and piping projects.

Edition 3 (286) March 2024

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