Poland Tenant activity rises

Gross demand remains stable, and interest in high-quality offices is growing, especially in cities such as Kraków, Wrocław and the Tricity. At the end of Q1 2025, the total stock of modern office space in the eight main regional cities in Poland came to 6.76 mln sqm. Kraków remains the largest market with 1.83 mln sqm, which constitutes 27 pct of the total office space in the regions. Second place comes Wrocław, which has 1.36 mln sqm of modern office space, or a 20 pct market share. The Tricity is in third place with 1.06 mln sqm, which comes to a share of around 16 pct. From January to March of this year, a total of 177,000 sqm of lease transactions were recorded, up by 27 pct on the first quarter of last year. The greatest interest is still seen in Kraków, where over 56,000 sqm of office space was leased, which makes up 32 pct of the total volume. In Wrocław, tenants acquired over 43,000 sqm (25 pct of the total), while in the Tricity 26,000 sqm was leased (15 pct). Higher gross demand compared to the same period of last year was also seen in the Tricity, Katowice, Poznań and Lublin. Lease agreements signed in the first quarter of 2025 were dominated by renegotiations, which accounted for 48 pct of the total volume. New leases accounted for 43 pct of all signed transactions, while expansions accounted for the remaining 8 pct.

Renewals often result in space reductions. We expect that over the rest of 2025, the hybrid work model will be redefined, which may result in employees being more ready to return to the office. This, in turn, will have a positive impact on the revival of demand in regional office markets.
Małgorzata Fibakiewicz, the director of the dffice space lease department at BNP Paribas Real Estate Poland.

The largest lease transactions over the period included the renewal of a lease agreement for 8.4,000 sqm in the Business Garden II complex in building K in Wrocław, by an undisclosed tenant, and a new lease agreement for 7,200 sqm in the Kraków DOT Office C complex. Three of the five largest transactions were concluded in Wrocław. The volume of new office space in the regions in Q1 2025 increased by only 2,400 sqm, the lowest ever recorded rise. New space was delivered in Poznań as part of the Dymka188 project by Dom Medialny Św. Wojciech. Over the coming months, individual office buildings are planned to be delivered, but overall development activity remains limited. Despite stable demand, investors are refraining from launching new projects due to the high vacancy rate. At the end of March 2025, around 1.18 mln sqm of office space was available immediately in the eight main regional cities, resulting in a vacancy rate of 17.5 pct. Over the period, Katowice and Kraków saw a reduction in the space available, while in Poznań and Wrocław saw an increase of over 1 percentage point. The highest availability of offices was in Łódź (22.3 pct), while the lowest was in Szczecin (8 pct).
According to BNP Paribas Real Estate Poland, vacant space is concentrated in buildings that are over ten years old and the high vacancy rate is likely to persist with the market needing from three to five years to absorb the excess space. Rents for class A office buildings on regional markets stood at EUR 12-17, while in new buildings or those in attractive locations they went as high as EUR 19.5 – 23 per sqm per month. The highest rates were recorded in Poznań, Kraków and Wrocław. Service charges did not exceed PLN 37 per sqm per month in any of the cities.

More space, more buildings
At the end of the first quarter, several projects were under construction with a total of nearly 310,000 sqm. The largest of these is Quorum Office Park B in Wrocław, with over 53,000 sqm. The project is being developed by Cavatina and is expected to be completed in the second quarter of 2025. Other large projects include AND2 in Poznań with 37,000 sqm. (Von der Heyden Group) and Tischner Green Park 1 in Kraków with 24,000 sqm of new office space (Stalprodukt).