In the first quarter of 2025, modern office space in Warsaw reached 6.28 million square meters. Only one new project was delivered during this period – the new headquarters of CD Projekt in the East office zone, adding 5,600 sqm to the market. The total space under construction or undergoing modernization was approximately 210,000 sqm. Gross demand reached 160,500 sqm, and the vacancy rate slightly declined quarter-on-quarter to 10.5%.
Development Activity and Market Trends
The market continues to show moderate but stable development activity. More than 130,000 sqm of new office space is expected to be completed by the end of 2025. However, very few new investments have been announced for post-2027, and the trend of modernizing and repurposing older buildings is becoming increasingly prominent.
Demand Overview
The most active areas remained the City Center and the Central Business District (CBD), together accounting for over 60% of total leasing activity. The vacancy rate in central zones was 7.4%, while in non-central zones it stood at 13%. Overall, there were nearly 660,000 sqm of unleased office space in Warsaw.
The business services sector generated the highest demand, representing 13% of all leased space, followed by banking, insurance, and investment, and manufacturing – each accounting for 10%.
Leasing Structure
New leases and pre-leases represented 49% of total tenant activity.
“The next 2–3 years may bring several large pre-let transactions. Given the limited number of speculative projects, pre-lets could become the primary way for tenants to secure space that meets their expectations in terms of location, layout, and standards,” explains Robert Pastuszka, Director, Office Agency.
Rental Conditions
- Prime central rents ranged from €22 to €28/sqm/month,
- Non-central locations saw rents between €16 and €19.5/sqm/month.
- In top-tier buildings, especially on higher floors, rates exceeded €30/sqm/month.
- Operating costs averaged around PLN 27/sqm/month.
Landlord’s Market
Market conditions are increasingly favoring landlords. Lease agreements are now more frequently signed for longer terms — seven-year contracts are becoming standard. After years of tenant dominance, the balance of power is shifting. Meeting high tenant expectations is now more challenging, and limited supply is putting upward pressure on rents, strengthening landlords’ position. This shift is a natural part of the market cycle, but it presents new challenges for tenants.
Timing Is Everything
For large companies, starting lease negotiations 2–3 years before current contracts expire is becoming essential to secure the best options. Smaller firms can benefit by simplifying decision-making processes, allowing them to act quickly when opportunities arise. Recent experience shows that delayed decisions can unnecessarily prolong the leasing process, making agility and flexibility key success factors.
What’s Next?
With rising fit-out costs, lease durations are also increasing. In new buildings, seven-year leases are becoming the norm, while in existing buildings, the standard is at least five years. Short-term leases, such as three-year contracts, are becoming increasingly rare.
In the near future, higher operating costs are also expected due to indexation, meaning that occupying office space will become more expensive. At the same time, renewals and renegotiations will likely represent a growing share of total annual leasing activity.
Authors:
- Agnieszka Bykowska, Research Analyst at Avison Young
- Robert Pastuszka, Director, Office Agency at Avison Young
