Regional office markets in Poland – Q1 2024
The limited activity of developers between 2024 and 2025 as a remedy for the lower demand
The beginning of 2024 saw a decrease in both demand and supply in leading regional markets. Approx. 31,000 m² of new office space was delivered, which is 37,000 m² lower than the corresponding period in 2023. This indicates a scenario where the average annual new supply for 2024 and 2025 will be approx. 110,000 m², which is approx. 70% lower than the average from 2016-2020.
After a record-breaking year in 2023, the market saw a correction, resulting in a significantly lower quarter-to-quarter demand in Q1 2024. At the same time, the renegotiation level stood at 47%, with pre-lets in projects under construction dropping to zero. The most popular choice among tenants was spaces in existing buildings aged up to five years. Regional markets continue to see an increase in vacancy rate. During the first three months of 2024, the vacancy rate was 17.8%, with buildings aged over 10 years seeing the greatest impact. These older buildings accounted for over 55% of the total vacancy volume and this space remaining available for a long period.
In the mid-term perspective, rental rates and lease terms are expected to remain stable, although landlords are offering increasingly attractive incentives to compete for tenants during renegotiations.