In the first quarter of 2025, regional office markets in Poland found themselves in a rare situation: demand for office space increased, while new supply practically disappeared. According to the latest Savills report, developers delivered just 2,400 sqm of new office space between January and March – located in the Dymka 188 building in Poznań. That’s more than 40 times less than the average for first quarters between 2015 and 2024, which stood at 100,500 sqm. Low developer activity, combined with growing demand, is expected to drive vacancy rates down and could lead to rent increases and reduced availability of space for tenants in the long term.
Office Stock Structure
As of the end of March, the total office stock across eight major regional cities reached 6.76 million sqm. The most developed markets remain Kraków, Wrocław, and the Tricity (Gdańsk, Gdynia, Sopot), which together account for 63% of the total supply. Each of these cities has over 1 million sqm of modern office space. Katowice, Poznań, and Łódź jointly contribute 31%, while Lublin and Szczecin make up the remaining 6%.
Currently, less than 203,000 sqm is under construction – a 26% decrease year-on-year. For comparison, the average annual volume under construction between 2015–2019 was 908,000 sqm, and 522,000 sqm between 2020–2024. This marked reduction in new investments could result in even less available space in the coming quarters, further limiting rental options for tenants.
Vacancy Rates
At the end of March, there were 1.18 million sqm of vacant office space in regional cities, translating to an average vacancy rate of 17.5% (down 0.3 percentage points year-on-year). Five cities reported vacancy rates above 15%: Łódź (22.3%), Katowice (21.1%), Wrocław (20.4%), Kraków (14.6%), and Poznań (15.0%). In the remaining cities, availability was lower, with vacancy rates ranging from 8% in Szczecin to 12.6% in the Tricity.
“Limited supply puts landlords in a relatively comfortable position, as it opens up potential for rent increases in the near term. However, with the current high vacancy rates and fierce competition, successful leasing today requires particularly active efforts to attract and retain tenants,”
— Daniel Czarnecki, Head of Landlord Representation, Office Agency, Savills.
Demand and Market-Driving Sectors
Despite minimal new supply, demand in regional cities remained strong, reaching 176,900 sqm in Q1 – up 27% year-on-year and 17% above the average for Q1s between 2020 and 2024. Tenants were especially active in Kraków (56,600 sqm) and Wrocław (43,800 sqm). Higher gross demand than the same period last year was also recorded in the Tricity, Katowice, Poznań, and Lublin.
Four industries – IT, business services, manufacturing, and finance – together generated 58% of total demand. The IT sector led with 18%, followed by business services (16%), manufacturing (14%), and finance (10%). Flexible office operators accounted for 5% as they expanded their presence in regional markets.
In terms of deal structure, nearly half of the volume (48%) came from renegotiations of existing leases. New leases represented 41%, with expansions making up 8% and pre-lease agreements 3%.
“The average vacancy level in the regions still hovers around 18%, which may give a false sense of comfort. But with historically low new supply, this ‘cushion’ could shrink faster than expected. Companies planning expansion or relocation should act early – reserving space well in advance and closing deals quickly to secure the best locations and conditions,”
— Jarosław Pilch, Head of Tenant Representation, Office Agency, Savills.
Rents and Operating Costs
Base rental rates for Class A office buildings in regional markets ranged from EUR 12.00 to 17.00 per sqm per month. Poznań had the highest rents (up to EUR 17), followed by Kraków and Wrocław (up to EUR 16.50). Operating expenses generally did not exceed PLN 37 per sqm per month, though actual costs depend largely on building efficiency.
Outlook
“By the end of 2027, developers plan to deliver up to 475,000 sqm of new office space. However, the majority of this is expected to enter the market only in the final year of the forecast. Much depends on market conditions – including further declines in vacancy, increased tenant activity, and access to financing for new projects,”
— Wioleta Wojtczak, Head of Research, Savills.
The current market environment favors owners of well-located and sustainable buildings, but it also raises the bar for future developments. Only projects of the highest standard, with excellent transport accessibility and backed by pre-let agreements, are likely to succeed in commercialization.
Source: Savills via CEO.com.pl
