Warsaw office market – Q3 2023

The office market in Warsaw saw a minor recovery over Q3 2023, when compared to H1 2023. Leasing activity recorded a small increase q/q, with the vacancy rate seeing a dip of 0.8% q/q. Limited new supply planned for FY2023 of approx. 72,000 m², as well as elevated fit out costs, had an impact on the share of lease renewals in total demand. The renewals represented approx. 43% in Q3 2023’s take-up.

Developers are slowly increasing the supply of leaseable space. Approx. 271,000 m² was under construction at the end of September 2023. In the Q3 2023, construction commenced on a number of projects: The Form (28,000 m²), Towarowa 22 bldg. B (30,000 m²), and Upper One (36,000 m²) .

The total take-up of 496,500 m² was over Q1-Q3 2023, with 174,000 m² in Q3 being registered alone. Comparing to Q3 2022, demand was 26% higher, due to the increase in the number of transactions completed. 

Office completions on the market over the last nine months totalled 20,300 m², of which 2,000 m² was delivered within the S-Bridge Office complex. In Q1-Q3 2023 period, the entirety of new deliveries were situated in the non-central districts. The completions planned for Q4 2023 are estimated at 46,000 m², with the majority being located in City Centre and Mokotów zones. 

Prime office rents over the Q3 2023 remained at q/q at €18-€26/m²/month in the central zones and €11-€17/m²/month out of the City Centre. Although there is a stagnation on the demand side, this state-of-affairs seems temporary. An acceleration of the economy, improving financial conditions and limited supply remaining on the market will stimulate rental growth in 2024 and 2025. In particular, it will apply to properties located in the City Centre, offering Hi-Tech solutions, ESG approach and implementation in a project.