Global real estate services firm Cushman & Wakefield has summarised the situation on the Warsaw office market for the third quarter of 2024. Office take-up, both in leasing volumes and transaction numbers, was comparable to that recorded in the same period in 2023. Meanwhile, muted development activity, falling vacancy rates – particularly in central locations – and shrinking land availability are likely to encourage investors to launch redevelopment projects.
SUPPLY: Development activity is likely to remain subdued until 2026
There are currently seven projects under construction, totalling 207,000 sqm and scheduled for delivery in the coming years. This volume is well below the average supply levels recorded in 2012-2023. Cushman & Wakefield estimates that approximately 103,000 sqm of new office space will be added to the Warsaw office market this year across nine office buildings,”
comments Ewa Derlatka-Chilewicz, Head of Research Poland, Cushman & Wakefield.
TAKE-UP: The centre of Warsaw continues to attract the largest tenants
Total leasing activity for the first three quarters of 2024 exceeded 492,000 sqm, a figure comparable to that posted in the same period last year. This is attributed to the gradual stabilisation on the office rental market and a trend among tenants towards optimising their office footprints. In addition, with 537 office leases finalised in the year to date, take-up in terms of transaction numbers also remained largely unchanged year-on-year. The relatively large volume of signed leases is testament to high liquidity on Warsaw’s leasing market. Occupier activity is expected to remain stable in the coming quarters,”
adds Jan Szulborski, Business Development & Insight Manager, Cushman & Wakefield.
Warsaw saw a strong third quarter in terms of the volume of large leases and an increased share of new leases in total take-up. Renewals continued to account for the vast majority of large lease transactions over 3,000 sqm, while the increased volume of pre-lets, including those signed in the previous quarter in the centre of Warsaw, marked a positive turning point for the market,”
comments Paulina Kopińska, Partner, Head of Warsaw Office Agency, Cushman & Wakefield.
VACANCIES: Office availability remains on a downward trend
This equated to nearly 671,000 sqm of unoccupied office space, marking a decrease of approximately 10,000 sqm compared to the second quarter of 2024. With new office supply expected to be constrained in 2024-2026, the city’s vacancy rate is likely to remain on a downward trajectory, enabling the Warsaw market to absorb surplus office space from existing stock,”
comments Jan Szulborski.
RENTS: Office location, quality and HICP rate are key drivers of rental growth
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more. For additional information, visit www.cushmanwakefield.com.