Knight Frank announced that Warsaw continues to lead the Polish office market, dominating both supply and demand dynamics. In the first half of 2024, Warsaw witnessed the delivery of 64,000 sqm of modern office space, accounting for 51 percent of the total new supply across Poland. Meanwhile, leased office space in Warsaw reached 316,000 sqm, representing 53 percent of the nation’s total leased space volume.
The demand for office rentals in Warsaw remains robust, with take-up levels in the first half of 2024 remaining steady compared to the corresponding period in the previous year. Surpassing the new supply, the take-up rate contributed to a 0.1 percentage point decrease in the vacancy rate during the second quarter of 2024.
Supply
As of the end of June 2024, the total office stock in Warsaw reached 6.26 million sqm, representing nearly half of all office resources in Poland. The central zones of Warsaw host the majority of this space, accounting for over 45 percent of the total. Beyond the city centre, Służewiec dominates with almost 1.1 million sqm of office space, holding close to a 17 percent share of the city’s overall office stock.
During the first half of 2024, approximately 64,000 sqm of modern office space were introduced to the market, marking nearly a 3.5-fold increase compared to the same period in the previous year. In Q2 2024, the completion of one building, VIBE A, with an area of 15,000 sqm, situated at Daszyński Roundabout, took place. Additionally, by the year’s end, three more buildings are projected to add a combined 37,000 sqm of office space to the market.
Nearly 83 percent of the office space under construction is concentrated in central locations, particularly around Daszyński Roundabout, where a significant number of office buildings have been erected in recent years. This area has evolved into one of Warsaw’s largest office clusters, boasting resources totalling nearly 788,000 sqm.
Take-Up
In the first half of 2024, a total of 316,000 sqm of office space was leased, representing a 3 percent decrease compared to the same period in the previous year. Tenant focus on cost reduction remained evident, with renegotiations claiming the largest share of the contract structure, comprising over 51 percent of the transaction volume. However, new contracts also held a significant share, accounting for just under 38 percent of the total transaction volume. A few tenants opted to extend their space, with expansions making up over 7% of the total take-up volume. Owner-occupier deals represented the remaining 4 percent of the volume leased.
In Q2 2024, similar to the preceding quarter, tenants displayed a growing preference for buildings situated in non-central districts of Warsaw, drawn by the favourable price-to-standard ratio. Over 57 percent of the office space was leased outside the city centre, primarily in Służewiec and the Jerozolimskie Corridor.
The proportion of office space leased in buildings with green certificates continued to expand, reaching 75 percent in H1 2024, a marked increase from 54 percent in 2023. This trend signifies both a rising tenant inclination towards ecological and sustainable office buildings and an increasing count of buildings obtaining green certifications.
Vacancy Rate
The vacancy rate in Warsaw during Q2 2024 stood at 10.9 percent, marking a decrease of 0.1 percentage points compared to the previous quarter and 0.5 percentage points compared to the same period last year. In the central area, the vacancy rate was 9.1 percent, reflecting a 0.5 percentage point decrease from the previous quarter, while in non-central districts, it remained constant at 12.3 percent. The lowest vacancy rate was observed in the Puławska Corridor at 5.3 percent, while the highest vacancy rate persisted in Służewiec at 19.6 percent.
Rents
During Q2 2024, asking rents for office space in Warsaw remained steady. Asking rents in central zones typically ranged from €18.00 to 27.00/sqm/month, with prime office buildings commanding rents that could notably exceed this range. In non-central zones, asking rents typically varied from €10.00 to 17.00/sqm/month. Service charges also remained consistent compared to the previous quarter, ranging from €4.20 to 9.00/sqm/month.
Dorota Lachowska, Head of Research at Knight Frank Poland, commented: “Warsaw’s office market continues to demonstrate its leadership and resilience, with robust leasing activity and increasing new supply shaping the landscape. The growing preference for sustainable office buildings and strategic locations, particularly in CBD and around Daszyński Roundabout, highlights the evolving needs of tenants. We anticipate continued stability in rental rates and a further decrease in the vacancy rate, driven by sustained demand and limited new supply.”
