2025-03-25
indicators

Over the past year, tenant behaviour in Poland’s office market has continued to evolve, shaped by a mix of economic, operational, and regulatory influences. Key factors such as ESG requirements, longer lease commitments, and increasing demand for flexibility are now central to leasing decisions. Changing Priorities Among Tenants Environmental, Social, and Governance (ESG) considerations are playing an increasingly prominent role in office selection. Companies are placing more emphasis on a building’s sustainability credentials and are beginning to expect ESG-related clauses to be included in lease agreements from the outset of negotiations. At the same time, the rising costs of office fit-outs have led to a noticeable shift in lease durations. Seven-year contracts are becoming standard in new developments, while leases in existing buildings typically run for five years or more. Short-term agreements, such as three-year leases, are now far less common. For tenants requiring greater flexibility, particularly smaller businesses, landlords are responding with shorter-term leasing options. These often involve standardised, ready-to-occupy spaces available for one or two years, aimed at organisations that do not require customised office fit-outs. Coworking is also seeing continued interest. Both independent providers and property owners are expanding their offerings, making flexible office arrangements more accessible. This reflects the wider move toward adaptability in workplace strategy and leasing structures. Pre-let Activity Likely to Increase With a limited number of speculative office developments in the pipeline, pre-let agreements may become a key avenue for tenants seeking high-quality, well-located space. Over the next two to three years, more organisations are expected to secure space through pre-let deals to ensure their specific requirements can be met. The limited availability of new supply may also impact existing lease terms. Tenants could face added pressure when negotiating renewals, especially if they aim to maintain favourable conditions amid reduced options. Market Balance Shifting Toward Landlords For a prolonged period, office tenants in Poland benefitted from strong negotiating power. However, the balance has started to shift. The current supply gap is putting upward pressure on rental rates, and landlords are now in a stronger position than in previous years. While this shift reflects a typical market cycle, it presents new considerations for tenants. Larger organisations are increasingly initiating negotiations well ahead of lease expiry—sometimes two to three years in advance—to secure suitable space. In contrast, smaller firms may gain a competitive edge by simplifying their internal decision-making, enabling them to respond quickly when opportunities arise. Recent market trends suggest that delays in the leasing process can lead to missed opportunities, making speed and preparedness more important than before. Complexity Around ESG Compliance While tenants today are generally more knowledgeable about the leasing process, the growing emphasis on ESG has introduced new challenges. Companies now require more specialised guidance in assessing buildings against ESG standards—a demand that was almost non-existent just a few years ago. As a result, lease negotiations often involve input from multiple specialists, including sustainability consultants, legal advisers, and facility planners. This complexity is contributing to longer decision-making timelines and requires a more coordinated approach among stakeholders. In summary, Poland’s office leasing market is adapting to changing tenant expectations and evolving conditions in supply and demand. ESG criteria, longer lease terms, and flexible options are now key factors in the decision-making process, while landlords are gradually regaining negotiating strength. As the market continues to shift, early planning and informed decision-making will be essential for tenants looking to secure the right space on favourable terms. By Robert Pastuszka, Director, Office Agency