Poland’s regional office market sees supply slowdown as developers exercise caution

Poland’s regional office market is undergoing a period of adjustment as high vacancy rates and shifting tenant demands shape investment decisions. According to AXI IMMO’s latest report, covering Kraków, Wrocław, Tricity, Katowice, Łódź, Poznań, Szczecin, and Lublin, developers have significantly reduced activity, with only 120,000 sqm of new office space delivered in 2024—a 56% decline from the previous year. Despite a 5% year-on-year drop in total lease transactions, the market is showing signs of stabilisation, as landlords focus on modernising buildings and introducing flexible leasing models.

The total modern office space in regional cities has reached 6.78 million sqm, reflecting a 2% annual increase. However, the slowdown in new projects is evident, as developers remain cautious due to the high vacancy rate of 17.8%. Katowice has the highest vacancy rate at 23.2%, while Szczecin reports the lowest at 7.7%. Among the largest office completions in 2024 were Grundmana Office Park A in Katowice (20,700 sqm) and Quorum Office Park A in Wrocław (18,200 sqm) by Cavatina, as well as Vastint’s B10 office building in Wrocław (14,100 sqm). Currently, 230,000 sqm of office space is under construction, with Kraków and Poznań leading activity.

According to Emilia Trofimiuk, Research Manager at AXI IMMO, developers are carefully assessing pre-leases before launching new projects, aiming to secure occupancy before breaking ground. Meanwhile, tenants benefit from increased negotiating power, as landlords offer more competitive lease terms and modern amenities to attract occupiers.

Tenant activity in 2024 totaled 710,000 sqm, with a notable shift towards lease renewals and renegotiations, which accounted for 51% of all transactions, while new leases comprised 41%. Kraków, Wrocław, and Tricity remained the most active leasing markets, driven largely by demand from the IT and business services sectors. Volvo Tech Hub signed the largest new lease of 2024, securing 10,100 sqm at Brain Park C in Kraków.

Rental rates have remained stable, ranging from EUR 9.00 to EUR 17.80 per sqm per month, with the highest rates in Kraków and Poznań. However, service charges have increased, now ranging from PLN 9.00 to PLN 36.80 per sqm per month, driven by higher building maintenance and energy costs.

Looking ahead, Monika Rykowska, Head of Research at AXI IMMO, forecasts moderate developer activity in 2025, with an estimated 160,000 sqm of new office space expected to be delivered. Future investments will depend on pre-lease commitments and market demand, while companies continue to optimize office space and prioritize flexible leasing solutions. The growing demand for co-working and serviced office formats is also expected to shape the market, as both building owners and external operators expand their offerings.