Saturday, 10 May 2025
At the end of 2024, the regional office market in Poland showed signs of recovering demand, but limited developer activity and a low supply of new office space created a supply gap. According to analysts at BNP Paribas Real Estate Poland in their latest report At a Glance: Office Market in the Regions, tenants increasingly opted to renegotiate existing contracts rather than relocate.
Limited New Developments
Developer activity in the office sector remained low, with just under 124,000 square meters of new office space added to regional markets throughout the year. High vacancy rates continued to slow down new developments, with only a few individual office buildings under construction.
Several projects were completed in the fourth quarter of 2024. The largest was Grundman Office Park A in Katowice, offering 20,600 square meters (Cavatina Holding), followed by the Medyczna Complex in Kraków with 9,700 square meters (ELITE GPS). In Wrocław, Aleja Architektów 7 added 6,000 square meters of office space (Entire M).
Some developers were forced to halt construction due to low pre-lease activity, which prolonged the commercialization process and led to difficulties in securing financing.
Recovery in Demand
The fourth quarter of 2024 saw a revival in leasing activity, with total lease transactions reaching 220,000 square meters—a 4% increase from the previous quarter and 5% higher than in the same period in 2023. Over the entire year, lease transactions totaled nearly 714,000 square meters, close to the 740,500 square meters recorded in 2023.
The demand structure was dominated by lease renewals, which accounted for 51% of all transactions. Companies preferred to extend existing agreements due to high fit-out costs, but when choosing to relocate, they prioritized newly built office buildings.
Among the largest transactions in the fourth quarter were a lease renewal of more than 14,000 square meters at Tertium Business Park II in Kraków and State Street Bank International’s renewal of over 10,000 square meters at Kazimierz Office Center, also in Kraków. New lease agreements included 6,600 square meters in Ocean Office Park B (Kraków) and 8,900 square meters in the .PUNKT office building (Gdańsk). The IT sector remained the most active tenant group, accounting for 27% of total demand in regional cities.
Rising Vacancy Rates
At the end of 2024, approximately 1.2 million square meters of office space was available for immediate lease in Poland’s eight major regional markets, resulting in a vacancy rate of 17.8%. This marked a 0.5 percentage point increase from the previous quarter and a 0.3 percentage point rise compared to the end of 2023.
Vacancy rates varied by city. The lowest was in Szczecin (7.7%), while Katowice (23.2%) and Łódź (22.7%) recorded the highest. In Wrocław (19.3%) and Kraków (19.0%), vacancies hovered around 20%, while in the Tri-City, Poznań, and Lublin, they remained below 14%. Older office buildings, particularly those over 10 years old, saw the highest vacancy rates, leading to more frequent renovations or conversions to alternative uses.
Office Optimisation and Modernisation Trends
The market continued to favor office consolidation and upgrades to higher-standard buildings. Fit-out projects increasingly focused on maximizing space efficiency and accommodating hybrid work models. Modular solutions gained popularity as companies sought flexibility and cost reductions.
Sustainability also played a growing role in office modernization. The reuse of resources became more prominent, driven by both economic factors and environmental, social, and governance (ESG) commitments. While the approach to sustainable solutions has become more pragmatic, it remains a key element of corporate strategies.
Looking ahead, stricter remote work policies and corporate investments, including those financed by the National Recovery Plan (NCP), may further influence market dynamics. Whether these factors will translate into sustained growth remains to be seen in the coming months.
Source: BNP Paribas Real Estate Poland
