More and more public institutions are planning to consolidate their office space. The motivation behind these actions is no longer limited to cost reduction — it is also about improving efficiency and creating a modern, secure working environment, says Marcin Kowal, Associate Director in the Office Agency at Newmark Polska.
Merging several locations into one or two modern headquarters makes it possible to significantly reduce the operational expenses of a public institution. Although relocation usually means choosing a new, better-equipped building with a higher rental rate per square metre, the reduced need for space offsets these costs. Institutions gain access to shared facilities, including a single reception desk, shared conference rooms, utility areas and public service space.
According to the Newmark Polska expert, office consolidation is increasingly viewed not only as a cost-saving measure.
“It’s a process that allows institutions to operate more efficiently, improve internal communication, document circulation, information flow, and ultimately the quality of customer service. Instead of several dispersed office locations — which generate costs and hinder cooperation — modern headquarters emerge, bringing various departments together under one roof,” Kowal emphasises.
Efficiency and Prestige: Two Pillars of Consolidation
Consolidation processes are increasingly strategic rather than merely tactical.
“For public institutions, the priority is a good location and convenient access by public transport — this applies to both employees and residents handling administrative matters. Central locations improve employee comfort, ensure citizen access to services and strengthen the institution’s public image,” explains Kowal.
“In addition to convenience and prestige, safety considerations are becoming more important — from meeting health and safety requirements to complying with the so-called ‘shelter act’, which obliges public buildings to be prepared for crisis situations. New office headquarters must also be fully accessible to people with disabilities and comply with ESG standards, which are now the norm in planning public investments,” he adds.
Relocation to a new office often goes hand in hand with adopting modern organisational and technological solutions. During the pandemic, many institutions introduced hybrid work models and digital document workflows.
“Public offices still mostly rely on individual rooms, but with a greater number of project rooms for 4–10 people than before. One of the key factors in selecting a location is the availability of expanded server rooms for institutions requiring additional technical space with specific parameters,” says the Newmark Polska expert.
Rent or Buy? A Difficult Choice for Public Institutions
One of the key dilemmas for public administration remains the decision whether to buy or rent a property. The choice depends primarily on the planned time horizon of occupancy, the institution’s financial stability and security requirements. Many public bodies would prefer to own their buildings, but this is not always feasible. Institutions often lack specialised staff capable of preparing and executing such a transaction, and the cost of purchasing property is itself a major barrier.
“Simplifying the matter, renting is the most cost-effective option in the short and medium term, when needs are temporary or subject to change, such as during organisational restructuring. It offers greater flexibility and requires lower upfront investment. Purchasing real estate is preferable for long-term plans and where specialised building functions are needed — such as archives, server rooms or advanced security systems. It’s also important to remember that in leased buildings, the owner handles day-to-day management and maintenance, while in a building owned by the institution, these responsibilities fall entirely on the public body,” explains Kowal.
A recent example of an institution that purchased an office building for its own use is the Marshal’s Office of the Łódź Voivodeship. The Brama Miasta II office building, with an area of over 14,000 sqm, is located at 66 Kilińskiego Street in Łódź, and the relocation is planned for the end of 2026. Other examples include the purchase of an office building on Jana Kazimierza Street in Warsaw’s Wola district by the Provincial Administrative Court, and the acquisition of a building on Słowicza Street in Warsaw by the Institute of Environmental Protection.
Partnership as an Alternative
Many public institutions own attractive plots of land that could be used for the construction of modern office buildings. The main problem, however, is the lack of specialised teams capable of carrying out such projects independently. In such situations, a potential alternative is public–private partnership (PPP). Under this model, a private investor builds an office building on land belonging to a public institution, following its technical requirements. The institution then uses the building for a specified period, paying a fee that partly serves as a repayment of the investment. After 20–30 years, the agreement expires and the building — sometimes after a final settlement — becomes the property of the public institution.
Although popular in Western Europe, PPP is still used only occasionally in Poland.
“PPP is an interesting model that can genuinely align public and private interests. The barriers to implementation typically involve complex procedures, lengthy negotiations and lack of experience on the administration’s side. However, the construction of the District Court in Nowy Sącz shows that such projects are indeed possible — the building was developed under a PPP arrangement and will be managed by a private company for 20 years before ownership transfers to the Court,” says Kowal.
Another model — extremely rare in Poland — is sale & leaseback. This consists of selling a publicly owned building while the institution simultaneously signs a long-term lease for that same property.
“This solution is used mainly in exceptional situations when quick access to capital is needed and the property does not have strategic significance. It allows the institution to rapidly raise funds and shift responsibility for managing, maintaining and renovating the building to the new owner,” explains the expert.
Benefits — but Also Challenges
Office consolidation within public institutions requires strict coordination and meticulous planning. Moving multiple departments into a single location necessitates maintaining continuity of operations and ensuring data security.
“The biggest challenge is the logistics of the entire process: relocation, IT system integration, work-standard alignment and overseeing procurement for equipment. Everything must take place without disrupting the daily functioning of the institution,” says Kowal.
He adds that ESG requirements are becoming a major challenge for public organisations.
“Starting in 2027, all public institutions will be required to report the energy efficiency classes of their buildings — this will either force upgrades to older facilities or require relocation to more energy-efficient headquarters.”
A particularly interesting example is the planned consolidation of two Bank Gospodarstwa Krajowego (BGK) branches, currently operating in separate locations, into a single headquarters. A thorough renovation of the historic building on Aleje Jerozolimskie in Warsaw is underway, and BGK plans to move into the modernised property in the first half of 2028.
A Model for the 21st Century
Despite its challenges, the consolidation of public administration office space delivers significant long-term benefits. Experts agree: the public sector is modernising to meet 21st-century standards not only through digital transformation, but also by consciously managing its real estate portfolio.
“A modern office may carry a higher cost per square metre, but overall it allows institutions to reduce the total occupied area and avoid duplicated expenses. It also enhances the institution’s public image — as modern, open and efficient. This is an example of a strategic approach to real estate that enables long-term planning for the development of public administration,” summarises the Newmark Polska expert.
Source: ceo.com.pl
