Modernization becomes key for office buildings in Poland’s regional cities

As Poland’s real estate market continues to evolve, a clear divide is emerging between Warsaw and the country’s regional cities. While the capital is set to see a surge in newly commissioned office space, developer activity in cities such as Wrocław and Gdańsk remains subdued. This shift is placing increasing emphasis on the modernization of existing office buildings as a critical solution to meet growing tenant demands and evolving regulatory requirements.

A recent Colliers report on the Central and Eastern European real estate market highlights that 230,000 square meters of new office space is expected to be delivered in Warsaw by 2026. In contrast, development activity in regional cities is significantly lower, pushing modernization to the forefront of industry discussions. Marcin Kosieniak, co-owner of the PM Projekt design office, emphasizes the urgency of this shift. “The need for modernization stems from the necessity to adapt older office buildings to contemporary standards, aligning with ESG requirements and evolving tenant expectations,” he explains.

With aging buildings accounting for 38% of Poland’s total CO2 emissions, modernization is becoming an essential strategy in meeting the country’s ambitious climate targets. Kosieniak notes that beyond repurposing spaces—an ongoing trend for several years—upgrading existing structures is now a priority across various sectors. Stricter EU regulations, investor demands, and legal frameworks are accelerating the push for more energy-efficient and environmentally sustainable real estate.

The modernization process is not only a regulatory necessity but also a business imperative. CO2 reduction efforts are increasingly being implemented through renovations and refurbishments, with a focus on enhancing energy efficiency and improving employee comfort. Kosieniak highlights the impact of modernization in diverse settings, including industrial facilities, where optimized heating and cooling solutions can significantly improve working conditions. “Retrofitting allows us to reduce energy consumption while increasing comfort levels—not just in office spaces, but also in production plants, where temperature regulation can be adjusted through carefully planned solutions,” he adds.

Despite the clear benefits, modernization presents financial challenges. Upgrading existing buildings requires significant investment, but experts warn that failure to do so could result in tenant migration to properties that meet ESG standards. Kosieniak argues that with new office developments stagnating in regional cities, modernization offers a practical and economically viable solution. “If demand for office space continues to grow in cities like Gdańsk or Wrocław, while new supply remains limited, modernizing older offices becomes the natural choice. It aligns with tenant needs and ESG regulations while ultimately offering long-term financial benefits through energy savings,” he explains.

The introduction of the EU’s Corporate Sustainability Reporting Directive (CSRD) is further reinforcing the need for modernization. Starting in 2024, large corporations must provide non-financial reports assessing their compliance with ESG principles. By 2025, the requirement will extend to other large companies, and in subsequent years, small and medium-sized listed businesses will also need to comply. As these regulations take effect, landlords and developers will face increasing pressure to invest in modernization to maintain property value, attract tenants, and ensure compliance with evolving sustainability standards.

With energy efficiency, sustainability, and tenant preferences shaping the future of office spaces, modernization is no longer just an option—it is a necessity for the long-term viability of Poland’s regional office markets.

Source: Marcin Kosieniak, co-owner of the PM Projekt