Global real estate services firm Cushman & Wakefield has summarised the third quarter of 2024 on the largest office markets in Poland. Office take-up in key regional cities remained on par with the figures recorded in the same period in 2023, signifying stability on the office rental market. Meanwhile, stagnation on the supply side, coupled with limited construction activity, is likely to push vacancy rates down in the future.
SUPPLY: Slower supply growth as the office development pipeline shrinks by 75%
Total new office supply in the year to date reached nearly 152,000 sqm, most of which was delivered in Warsaw, Wrocław and Krakow. However, the pace of office deliveries across Poland has slowed steadily over the past three years. Although a handful of office projects have broken ground, development activity remains subdued. For example, there is only around 210,000 sqm under construction in Warsaw, while the office development pipeline in regional cities stands at just over 200,000 sqm, accounting for only 25% of the pre-pandemic volume,
comments Ewa Derlatka-Chilewicz, Head of Research Poland, Cushman & Wakefield.
Cushman & Wakefield estimates that another 70,000 sqm of office space will be delivered across Poland by the end of 2024. New supply in 2025 is expected to reach approximately 220,000 sqm, a figure comparable to this year’s, with an uptick in development activity unlikely before 2026,
adds Vitalii Arkhypenko, Market Analyst, Cushman & Wakefield.
TAKE-UP: Leasing activity is comparable to last year’s
In the first three quarters of 2024, total leasing activity in Warsaw amounted to 492,200 sqm, a figure comparable to that posted in the same period last year. This is attributed to a gradual stabilization on the office rental market and a trend among tenants to optimize their office footprints,
explains Jan Szulborski, Business Development & Insight Manager, Cushman & Wakefield.
Leasing activity in regional cities amounted to just over half a million square metres, down by a mere 4% from the same period in 2023, when regional office take-up hit a record high. Demand continued to come predominantly from IT, services and manufacturing. Renewals accounted for the largest share of the transaction volume at 53%, while new leases and expansions made up 43% and 4% respectively,
comments Michał Galimski, Partner, Head of Regional Markets, Cushman & Wakefield.