AXI IMMO - Warsaw Office Market in 2024: Stability, Centralization, and Future Challenges

The Warsaw office market in 2024 experienced a period of stabilization, with new supply increasingly concentrated in the city center and a high number of lease renegotiations shaping market dynamics. Despite marginal annual increases, the vacancy rate maintained a downward trajectory, indicating steady demand. According to the latest “Office Market in Warsaw 2024” report from AXI IMMO, key market drivers for 2025 will include a shortage of large office spaces, the growing influence of ESG criteria, and the continued rise of flexible office solutions.

The supply of modern office space in Warsaw expanded by 100,000 square meters in 2024, bringing the city’s total office stock to 6.29 million square meters. Notable new office completions included The Form by Lincoln Property, Lixa Buildings D and E by Yareal, Saski Crescent by CA Immo, and the first phase of the Vibe complex by Ghelamco. Development activity remained heavily focused on the city center, particularly around Rondo Daszyńskiego, which has emerged as the leading investment hub for office properties. Central districts accounted for 83% of new office supply, reflecting strong occupier demand for prime locations.

Emilia Trofimiuk, Research Manager at AXI IMMO, highlighted that while new projects continue to be delivered, the overall office stock remains relatively stable as outdated buildings are increasingly repurposed, often for residential use. Currently, over 230,000 square meters of office space is under construction in Warsaw, with 86% located in the central business districts. Major projects in the pipeline include The Bridge by Ghelamco, Upper One by Strabag, the redeveloped V Tower by Cornerstone, Office House by Echo Investment, Studio A by Skanska, and Skyliner II by Karimpol.

At the close of 2024, Warsaw’s office vacancy rate stood at 10.6%, reflecting a slight year-on-year increase of 0.2 percentage points. However, on a quarterly basis, the trend remained downward, with a marginal decline of 0.1 percentage points. The highest vacancy rates were observed in the Służewiec business district, where 19.7% of office space remained unoccupied due to an oversupply of outdated stock. In contrast, the central office zones recorded a significantly lower vacancy rate of 8.8%, underscoring the continued demand for prime locations.

Office leasing activity in Warsaw totaled 740,000 square meters in 2024, reflecting a slight 1% year-on-year decline. Lease renegotiations dominated transaction activity, accounting for 46% of all deals, marking a three-percentage-point increase from the previous year. Net take-up, which includes new leases and expansions, declined by 6% year-on-year, reaching 400,000 square meters. This drop was largely attributed to a limited supply of large office spaces and a growing trend of subleasing as companies sought cost-optimization strategies.

The largest leasing deal of the year was Santander Bank’s pre-let of 24,500 square meters in The Bridge. Other major transactions included lease renewals and renegotiations at Atrium Garden, Varso Place 2, T-Mobile Office Park, and Domaniewska Office Hub, with spaces averaging between 13,000 and 14,000 square meters. The most active tenant sectors in 2024 were finance, manufacturing, business services, and IT, demonstrating a continued corporate presence in Warsaw’s office landscape.

Rental levels in prime office buildings in central Warsaw ranged between EUR 19.00 and EUR 26.50 per square meter per month, with premium spaces exceeding EUR 30.00 per square meter. In non-central locations, rental rates started at approximately EUR 9.00 per square meter per month. Despite inflationary pressures and rising construction costs, rental prices remained stable compared to the previous year. However, service charges increased significantly, ranging from PLN 12.00 to PLN 45.00 per square meter per month, largely due to higher operational expenses and ongoing building modernizations.

Looking ahead to 2025, development activity in Warsaw is expected to remain concentrated in central locations, particularly around Rondo Daszyńskiego, where approximately 140,000 square meters of new office space is scheduled for completion. Market trends are likely to revolve around the limited availability of large office units, the growing preference for flexible office solutions, the optimization of occupied spaces, and the renovation of older buildings to align with ESG standards.

Jakub Potocki, Associate Director at AXI IMMO, predicts that tenants will increasingly prioritize office design and quality, while landlords will adapt their offerings to accommodate shifting market demands. With evolving workplace preferences and sustainability considerations shaping investment strategies, Warsaw’s office market is set for another dynamic year.