The limited new supply in the Warsaw office market has led to a decrease in vacancy rates, which reached 10.6% in Q4 2024. While rental rates remain stable, the market is becoming increasingly polarized, with tenants showing growing interest in sustainable properties. What does this mean in practice?
The vacancy rate in central Warsaw stood at 8.8%, while in non-central locations, it reached 12%. These differences stem not only from the location of buildings but also from their age. New properties delivered after 2020 have significantly lower vacancy rates at 5.5%, confirming the increasing demand for modern, high-standard office buildings.
“The high activity of tenants in top-class office buildings, such as those around Rondo Daszyńskiego, combined with limited new supply, means that companies looking to secure space in the most attractive projects are willing to accept higher base rents to increase their chances of leasing,” commented Piotr Kalisz, Director of Tenant Representation at Knight Frank.
The Warsaw office market continues to experience limited developer activity. Although over 104,000 sqm of modern office space was delivered in 2024, representing a 71% increase compared to 2023, this figure remains well below the five-year annual average of 219,000 sqm.
“We recently had the opportunity to witness the importance of location and building selection when representing a client looking to sublease their office space. While the transaction has not yet generated direct profit from the sublease, the client successfully eliminated rental costs, and all expenses related to office adaptation were covered by the subtenant,” added Piotr Kalisz.
Demand for high-end office buildings is also driven by ESG considerations. Sustainable, energy-efficient, and environmentally friendly buildings are attracting more tenants, further limiting the availability of premium office space.
“In 2024, as much as 76% of leased office space in Warsaw was in buildings with green certifications. Moreover, 45% of these were properties meeting the highest environmental standards, holding BREEAM Excellent and Outstanding, as well as LEED Platinum certifications,” explained Dorota Lachowska, Director of Market Research.
