AXI IMMO, Poland’s largest commercial real estate firm, published a report ‘Office Market in Warsaw in Q1-Q3 2024’, summarising the present condition in the capital’s office market. 

Developer activity in the Warsaw office space market is progressively increasing. More than 70,000 sq m finished by the end of September 2024 and around 280,000 sq m under construction in the coming years, demonstrate that investors and developers are moving the industry forward. Take-up stays steady at roughly 490,000 sq m in Q1-Q3 2024.

From the beginning of 2024, ¾ of new office space was delivered in the capital’s central zones  

At the end of Q3 2024on the Office Market in Warsaw, the total stock of modern office space in Warsaw stood at 6.24m sq m. Between January and September 2024, developers supplied more than 70,000 sq m to the capital’s market, with completed developments including Saski Crescent after modernisation (15,500 sq m, CA Immo), Vibe A (15,000 sq m, Ghelamco), Lixa D and E (9,300 sq m and 16,900 sq m respectively, Yareal). As much as 76% of the new space was developed in the central office zones of Warsaw. 

Daszyńskiego Roundabout is the largest office centre in Warsaw 

Emilia Trofimiuk, Research Manager, Research Department, AXI IMMO, comments: “On the Warsaw office market, we are seeing a gradual return of developers to somewhat more activity. Developers are initiating new investments, emphasising the city’s centre zones. The Centre-West office subzone, near Daszyńskiego Roundabout, has 1.15m sq m of existing space, accounting for about 18% of the capital’s total office stock. In turn, the whole Warsaw office market has 15% more new supply under construction than last year, showing a steady recovery of developer activity and additional market expansion in the future years.” 

Office developers’ activity in Warsaw is increasing 

As we can find in the report “Office Market in Warsaw in Q1-Q3 2024” there are now over 280,000 sq m of contemporary office space under development (+15% year on year), with around 200,000 sq m expected to be completed by the end of 2025. Developers are concentrating on the centre of Warsaw, where 82% of new stock is being built. One office project, The Form, with a total area of 28,300 sq m, is on track to be finished by the end of 2024. Other notable projects under development include The Bridge (47,000 sq m, Ghelamco), Upper One (35,900 sq m, Strabag), and V Tower (32,700 sq m, being modernised, Cornerstone). 

The Służewiec and Żwirki i Wigury zones have the most available office space 

After the third quarter of 2024, the average vacancy rate in Warsaw’s office market was 10.7% (-0.2 percentage points quarterly and +0.1 percentage points year on year). Traditionally, Służewiec (19.7%) and the Żwirki i Wigury Street corridor (15.2%) had the greatest vacancy rates. 

Tenant Activity in the Status Quo 

Since the beginning of 2024, gross take-up in the Warsaw office market has reached roughly 490,000 sq m, suggesting stability compared to the same time in 2023. From January to September 2024, the Centrum, Służewiec, and Central Business District zones had the most leases. New agreements accounted for 44% of all transactions in the take-up structure, while expansions and space for personal use accounted for 7% and 6%, respectively. 

Largest recorded transaction in the Warsaw office market from Q1 to Q3 2024 

Bartosz Oleksak, Associate Director, Office Space Department, AXI IMMO, said: “Since the beginning of the year, tenants from the banking, insurance, IT, business services, and manufacturing sectors have been the most active in the Warsaw office market. According to observed trends, client relocations from neighbouring office zones and subzones to the region of Daszyńskiego Roundabout continue to be significant. These are demonstrated by the largest transaction in Q3 2024. Santander Bank will relocate from the Central Business District zone to The Bridge building in the Centre-West zone, occupying a 24,500 sq m space under a pre-let agreement. AXI IMMO represented a customer that relocated from Mokotów-Służewiec to a new office space near Rondo Daszyńskiego, measuring roughly 1,300 sq m.” 

Rental rates stabilisation 

In the Warsaw Office market at the end of Q3 2024, offer rentals in Warsaw’s most renowned, centrally situated office buildings varied between EUR 19.00 and EUR 27.00/sq m/month, with some schemes reaching EUR 30.00/sq m/month or more. In non-central districts, offer rentals began at EUR 10.00 per sq m monthly. 

Changing tenant preferences and new norms in Warsaw workplaces 

Jakub Potocki, Associate Director, Office Space Department, AXI IMMO, explains: “’We are witnessing a trend towards lengthening the duration of new leases, with 7-year leases becoming more common. Following the pandemic, corporations are attempting to maximise their office space by shifting to more desirable locations and altering workplaces to satisfy the demands of employees in a hybrid model. In the Warsaw office market, the minimal cost of completing the shell and core space stays about EUR 800-900 per sq m. In addition, the capital’s office sector is experiencing the repositioning and refitting of older B-class office buildings and the conversion of purpose to residential. Many instances of this can be seen today in the Służewiec district, among others. Another tendency is the destruction of older office buildings to use the available land to develop contemporary office structures that meet current market criteria. Replacing the destroyed Atrium International office building with the newly planned Upper One project is one example of such a procedure in which the office function will be maintained. The new buildings continue the ESG trend by providing additional green space and community amenities. Office buildings are also implementing various technological innovations to save energy expenditures.” 

About AXI IMMO 

AXI IMMO offers comprehensive advisory services related to commercial real estate, including warehouse and office leasing and property management, real estate valuation, land acquisition, and sales. The firm also offers B2B and B2C supply chain management services. AXI IMMO’s greatest advantage is combining international business standards with deep local market knowledge. AXI IMMO has received numerous awards, including Best Local Agency of the Year in 2012 – 2019 and 2021 in the CiJ Awards and the award for Best Team in the warehouse sector in 2016 – 2017. In 2019 and 2023, the firm was the winner in the Local Agency category, and in 2024 it was named Advisor of the Year at the CEE Investment Awards. AXI IMMO was named Local Agent of the Year in 2023 and 2024 in the CEE region at the CEEQA awards. The firm’s most recent achievement is the title of Advisor of the Year in the Prime Property Prize 2024.