Poland’s Office Market: Recovery Deepens as Limited Supply Supports Prime Assets

Poland’s office market is moving further into recovery, with Warsaw setting the pace amid historically low new supply and firm demand for prime, ESG-compliant space. In Warsaw, new completions totalled about 85,200 sq m in the first half of 2025, led by The Bridge and Office House, underlining a development pipeline that remains tight by historical standards. Market trackers note that the first quarter of 2025 marked the lowest quarterly new supply in more than two decades, reinforcing competition for best-in-class buildings.

Vacancy in the capital stood at just under 11 percent at the end of June, but central zones were tighter, with rates below 8 percent. Leasing in Warsaw reached roughly 301,400 sq m in the first half of the year, with the city centre accounting for the bulk of transactions. Regional hubs are also active: Kraków posted 172,000 sq m of take-up in the same period, its strongest half-year on record.

Tight supply and selective demand are supporting pricing at the top end. In Warsaw’s best buildings, headline rents typically range between €25 and €35 per sq m per month, while prime office yields in Poland are around 6.25 percent in the capital, with higher levels in regional cities. Advisors note that prime European office yields showed early signs of stabilisation and even compression through the second quarter of 2025, a trend investors are watching closely in Central Europe.

On the investment side, activity has been rebuilding. In 2024, Poland recorded around €5 billion in commercial real estate transactions, with offices and retail each accounting for roughly a third of the volume and logistics making up a quarter. In the second quarter of 2025, investment exceeded €1 billion across sectors, with offices remaining active but not always dominant each quarter. The market’s recent benchmark deal remains Warsaw UNIT, sold for €280 million in late 2024, the largest single office transaction in Europe that year.

Macro conditions provide a supportive backdrop. Poland’s nominal GDP is hovering around $1 trillion in 2025, placing it among the top 20 economies worldwide. EU funds and near-shoring continue to underpin occupier expansion in business services and technology. Against this context—and with few speculative starts in the pipeline—Warsaw’s prime segment looks set to remain tight, while older or peripheral stock continues to face higher vacancy and greater re-positioning pressure.

Source: Knight Frank