Warsaw's Office Market: A Closer Look at Q2 2025

 

The second quarter of 2025 was a pivotal period for Warsaw's office market, witnessing the largest volume of newly delivered space in three years, totaling nearly 80,000 sq m. Major projects contributing to this surge included The Bridge (47,000 sq m), Office House (27,800 sq m), and Nowa Bellona (4,800 sq m), all strategically located near Rondo Daszyńskiego, a prime business hub.

 

However, this influx of new supply is set against a backdrop of a historically low construction pipeline. The volume of projects currently under construction has fallen to approximately 150,000 sq m, suggesting a potential decrease in the availability of modern office spaces in the coming years. Notable projects still underway include Upper One (35,500 sq m), V Tower (30,800 sq m), and Studio A (26,600 sq m).

 

Demand Trends: Stability with a Focus on Renewals

 

Despite the fluctuations in supply, demand for office space in Warsaw remains stable. The total gross transaction volume in Q2 reached 154,700 sq m, contributing to over 300,000 sq m for the first half of the year, a modest 5% decrease year-on-year. Central city areas and Służewiec continue to attract the most interest from tenants.

 

Lease renewals dominated transactions in Q2, accounting for 59% of activity, underscoring a trend of businesses opting to stay in their current locations. New leases made up 34%, while expansions represented 6%. Pre-leases were notably rare, comprising only 4.1% of tenant activity in the second quarter.

 

Key transactions in Q2 included Polkomtel's renewal of 22,000 sq m in Multimedialny Dom Plusa in Służewiec, a confidential lease of 18,000 sq m in Generation Park X, and PZU's renewal for 6,500 sq m in Konstruktorska Business Center.

 

Vacancy Rates: Opportunities Emerge in Specific Locations

 

As of the end of June 2025, Warsaw's overall vacancy rate saw a positive decline to 10.8%. Within the city center, availability tightened further, falling to 7.8%. Conversely, non-central locations experienced a slight increase in vacancy, reaching 13.3%.

 

A more detailed look reveals significant variations across submarkets. Służewiec recorded the highest vacancy at 21.1%, potentially offering more negotiation leverage for businesses. In contrast, Centrum Zachód (5.4%) and the Ursynów and Wilanów areas (7.3%) exhibited the lowest vacancy rates, indicating high demand and limited availability. Interestingly, newer buildings (up to 5 years old) boast the lowest vacancy rate at 4.9%, highlighting the strong appeal of modern, high-quality spaces, compared to older buildings (over 10 years old) where the rate stands at 13.7%.

 

Rent Stability and Outlook for Businesses

 

Asking rents in Warsaw's office market have remained stable. While new projects may command slightly higher prices due to their modern specifications and amenities, the overall market pricing is consistent. This stability, combined with the current low construction pipeline, suggests that while new supply has temporarily eased the market, businesses looking for state-of-the-art office spaces in the coming years may face fewer options and potentially less flexibility in older, less desirable buildings. Strategic planning and early engagement with market experts will be crucial for securing optimal office solutions in Warsaw's evolving landscape.

 

Source: nowawarszawa.pl