Warsaw continues to see many office transactions take place

The downturn in leasing activity was due to a high base effect as the first quarter of 2022 saw five large-scale companies lease a total of more than 110,000 sq m of office space. The occupational market is, however, recovering, as evidenced by the number of lease transactions executed in the first half of 2023, which was down only 3% year-on-year but up by 6% compared to the pre-pandemic figure,

comments Ewa Derlatka-Chilewicz, Head of Research at Cushman & Wakefield.

In the first half of 2023, the structure of demand was dominated by relocations which accounted for approximately 61% of all deals. Renegotiations and expansions made up 35% and 4% of the leasing activity, respectively,

says Jan Szulborski, Office Market Expert, Cushman & Wakefield.

Cushman & Wakefield estimates that in the second half of the year the Warsaw office market will expand by around 47,500 sq m across four office projects, bringing 2023’s total new supply to approximately 66,000 sq m. As a result, this year’s development activity will hit its lowest in nearly 25 years. However, despite an unfavourable economic environment, Warsaw’s office development pipeline increased by almost 60,000 sq m to nearly 221,000 sq m. This includes Upper One, an office and hotel complex which is being developed in the vicinity of ONZ Roundabout. Looking ahead, more projects are expected to be launched in the centre of Warsaw,

says Anna Górska-Kwiatkowska, Head of Leasing Services, Cushman & Wakefield. 

The rate of absorption will be the fastest in the central zone and modern office buildings featuring ESG solutions that are increasingly sought after by tenants,

adds Jan Szulborski.

The pricing policy of landlords for existing office stock will largely depend on such factors as the location, age, quality and occupancy levels of their building portfolios,

concludes Ewa Derlatka-Chilewicz.