The Polish real estate market has entered a phase of real estate recycling. However, demolitions clearly outweigh genuine building conversions, and the new projects replacing them will deliver only a limited amount of office space, says Walter Herz.
Although the idea of a ‘wave of conversions’ is widely discussed in the context of changes taking place in the Polish real estate market, the number of projects carried out under a true ‘reuse & refurbish’ model remains marginal. Most conversions are based on the demolition of existing buildings and the construction of new ones, rather than on projects focused on the modernisation and adaptation of existing structures.
“There is a lot of discussion about conversions, but there are very few real examples of such projects on the market. In most cases, older office buildings are demolished rather than modernised. They are mainly replaced by residential developments, which leads to a systematic reduction of office stock in the largest cities, particularly in Warsaw,” notes Bartłomiej Zagrodnik, Managing Partner and CEO of Walter Herz.
A negligible number of conversions are based on genuine refurbishments
Conversion projects based on the modernisation of existing office buildings are carried out only sporadically. In Warsaw, only a few such examples can be identified.
The office building at 1A Moniuszki Street, located in the very centre of the city, is set to be converted into a residential apartment building following a change of ownership. The property at 29 Siennicka Street, where acquisition was advised by Walter Herz, has already been converted from office to residential use. The Nowy Świat 2.0 building will also return to residential use – it was originally developed as a residential property before later serving as office space. The project already has a building permit.
The former CPD office building from the 1990s, located on Cybernetyki Street, has also been designated for residential use and is being redeveloped as part of the Esy Floresy housing project. The acquisition transaction was supported by Walter Herz.
An example of a conversion of a different nature is Warsaw’s Lipowy Office Park complex. Building A, formerly the headquarters of Bank Pekao, has been adapted for use by the National Police Headquarters, while Building B, following refurbishment, has been converted into student housing operating under the SHED Co-living brand.
Residential development is absorbing Warsaw’s office stock
However, far more frequently than refurbishments, the market is witnessing the demolition of existing office buildings. One of the most symbolic examples is Warsaw’s Intraco building on Stawki Street – the capital’s first modern high-rise office tower. The building is set to be demolished and replaced by a new office tower, Intraco 2, of a similar height – 107 meters.
Another landmark to disappear from the city skyline is the Ilmet office building at Rondo ONZ roundabout, which will be replaced by the new Warsaw One office tower, reaching approximately 188 meters. A new office building will also be developed on the site of the property at 79 Ostrobramska Street in Praga Południe.
In most cases, however, demolitions result in a change of use to residential. Following the demolition of three office buildings symbolic to Służewiec’s business district — Saturn, Sirius, and Orion, part of the Empark Mokotów Business Park – the Moderna Mokotów residential development will be delivered. The Libro Mokotów office building on Postępu Street will also be removed from the market to make way for a residential project. The Cybernetyki Office Center, which recently changed ownership, is also slated for redevelopment for other uses.
Several hundred additional apartments will be developed following the demolition of the Trinity One office complex at the intersection of Domaniewska and Suwak streets. Five office buildings at the junction of Marynarska and Wynalazek streets will also disappear from Mokotów’s landscape to make way for the Marynarska Living residential project. Similarly, the building at 4 Konstruktorska Street, the former headquarters of Polkomtel, will change use.
Cost analysis does not favour office refurbishments
“Decisions to demolish rather than refurbish are driven primarily by economic considerations. The cost of upgrading older office buildings can be higher than constructing new ones, and their structures often make it impossible to implement modern architectural and technical solutions,” explains Bartłomiej Zagrodnik.
He emphasises that at current rental levels, many office projects are no longer economically viable. “New developments are constrained by record-high construction costs, driven in part by stringent ESG requirements, as well as by formal and administrative barriers and limited access to bank financing. Another reason developers are shifting toward residential projects is that office rental income in Poland is significantly lower than in Western European markets, while returns from residential leasing remain much more comparable,” says Bartłomiej Zagrodnik.
Prime office rents in Warsaw currently range from €22–26/sqm, compared with €40–50/sqm in Berlin, €30–36/sqm in Barcelona, and as high as €110–130/sqm in London’s West End. In contrast, residential rents in Warsaw (PLN 75–90/sq m) are much closer to levels in Berlin (€18–22/sqm; PLN 80–100/sqm), Barcelona (€20–28/sqm), and London (£30–45/sqm; PLN 150–250/sqm).
“As long as office rents in Poland remain well below Western European levels, office-to-residential conversions will only be undertaken in cases where the buildings have exceptionally good initial parameters,” concludes Bartłomiej Zagrodnik.
The deficit of modern office space is increasing
Developers have halted almost all new office investments across the market. A major challenge remains the extremely limited new supply, particularly in Warsaw. Individual projects, such as the office building under construction in the second phase of the Towarowa 22 mixed-use development, are insufficient to close the growing supply gap.
Across Poland, just over 400,000 sqm of new office space is currently under construction. By comparison, during the development boom, both in Warsaw and regional cities, up to 800,000 sqm of office space was under construction at any given time. In Warsaw alone, only around 60 thousand sq m of new office space is planned to be delivered in 2026.
Meanwhile, demand for office space in Poland remains stable and high, with the greatest demand generated in Warsaw and Krakow. According to Walter Herz estimates, around 1.5 million sq m of office space will be leased to tenants in the largest cities in 2025; roughly the same volume as last year.
Amid a growing deficit of modern office space, Warsaw’s Służewiec Przemysłowy district is back in the spotlight. This area offers a significant stock of vacant office space (with vacancy levels at 17–18 per cent), which is once again seeing leasing activity.
Companies are increasingly choosing refurbished office buildings in the Mokotów district rather than waiting 2–3 years for new projects in central locations. At the same time, they are willing to pay higher rents for high-quality, well-connected workspaces.
If the current supply-and-demand situation persists in the coming quarters, the Warsaw market could face a significant increase in rental rates, particularly in the city’s central business district.
